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Some U.S. Ethanol Makers Looking to Buy Brazilian Corn
USAgNet - 06/19/2019

Some U.S. ethanol makers are considering buying corn from Brazil to guarantee supply as domestic crop prices are rising, the chief of the Renewable Fuels Association said on Tuesday.

Reuters reports that U.S. corn is fetching five-month high prices, including a more than 25% increase since May, as the crop outlook has deteriorated due to unfavorable weather. Prices in Brazil have risen more slowly, and the country is harvesting its largest corn crop ever.

"I haven't heard that it is happening, but I have heard some chatter that there are people looking at it, because of the growing spread between U.S. and Brazil corn prices," said Chief Executive Geoff Cooper in an interview on the sidelines of the Ethanol Summit 2019 in Sao Paulo, organized by cane industry group Unica. "Logistically, there may be some places where that could work, the West Coast for instance."

Brazilian grain analyst Agroconsult cited reports of U.S. ethanol makers, mostly on both coasts, buying corn from Brazil and Argentina.

Besides price, a major factor driving those deals is the difficulty in transporting corn from some U.S. areas to domestic ethanol facilities due to waterway disruption after rains, said Andre Pessoa, Agroconsultís chief analyst.

Brazil's ethanol industry, largely based in sugarcane, believes the U.S. corn situation could expand demand for its fuel.

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