Flooding in South America is likely to do a number on crop production, but that was not the reason given by the U.S. Dept. of Agriculture (USDA) for the 2 million metric ton cuts seen in the USDA‘s latest WASDE report for both Brazilian and Argentine corn.
USDA Chief Economist Seth Meyer explains the drop:
“For Brazil, that’s largely an area change for us in terms of of Brazilian corn production. But that second crop corn area, you know, we had talked about farmers perhaps pulling back on area because of the the less favorable returns for corn production and they certainly appear to have done so. So, that’s the major driver in terms for that two million metric ton reduction in Brazilian corn production.”
Seth Meyer, USDA Chief Economist
According to Friday’s report, the USDA predicts Brazil to harvest 122 million metric tons of corn and Argentina to produce 53 million metric tons.
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