Brazil May Be Exporting Corn to U.S.

For several weeks there have been rumors that less expensive Brazil corn may have been bought up by livestock companies in the U.S. as corn prices surge from the ongoing drought, and the need to lock in product before it was acquired by other countries may have pushed the deals forward.

The numbers being thrown around, but which haven't been confirmed yet, are as much as 1 million tons of Brazilian corn may have been acquired for delivery in the latter part of 2012.

A consortium of livestock buyers are behind the corn import rumors, and if true, the deliveries would arrive between October and December in the U.S.

This would be especially attractive to the Southeast portion of the United States, where it's more expensive to buy domestically at this time than it is from Brazil.

That's not only because of the rising price of corn, but the lack of railways to deliver the corn from the Midwest to the Southeast.

At this time the price of Brazilian corn stands at $274 a ton for September shipments. Freight costs are an additional $30 a ton.

Corn delivered within the U.S. is priced at approximately $311 a ton when delivered to the Southeast region of the country.

Concerns in the U.S. remain for corn stocks, which have dropped to 16-year lows, and which the drought could end up hurting if it doesn't end soon.