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Could Brazil be Buying U.S. Grain?
USAgNet - 04/26/2016

The grains market is abuzz with speculation that drought-hit Brazil has bought its first major cargo of U.S. corn in two decades, as the world's third-largest corn grower scrambles to secure feedstock with no sign of the supply crisis easing.

According to Reuters, the talk comes after Brazil, Latin America's largest economy, last week scrapped import taxes on corn from countries outside the Mercosur trade bloc, its latest effort to curb record domestic prices and boost supplies.

Soaring exports have starved the nation's consumers, like poultry producers, while farmers worry the prolonged dry spell could damage the upcoming crop due to be harvested in June.

Bumper prices and the duty suspension have triggered a flurry of dealmaking as the supply crunch offers traders in the region an unexpected, and unusual, new market for the world's excess corn.

About 700,000 tonnes of corn have been booked from Argentina and Paraguay, which enjoy a tariff-free trade with Brazil under the Mercosur customs agreement, reports Reuters.

U.S. Department of Agriculture export inspections data may soon reveal the destination, though traders said the disclosure would more likely come later as shippers may need more time to finalize the details of the transaction before physically loading a vessel.

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