Farmers in the Brazilian state of Mato Grosso have reported a shortage of grains and oilseeds storage, AgriCensus wrote on 13 October.

Limited storage options could particularly hit domestic corn supply at a time when Brazil prepared to harvest what was expected to be a bumper soyabean crop, the report said.

“Farmers have been holding back on corn spot sales waiting for higher post-harvest prices but a ‘leftover’ pressure is likely ahead as producers need to sell off stocks to free up space for upcoming soyabeans,” HedgePoint Global’s Victor Martins told AgriCensus.

“In January, this leftover pressure tends to hit the market,” Martins added.

However, there was no consensus on how the storage shortage would impact the domestic market, the report said.

“If the new soyabean crop meets its potential, spot corn sales may gather some momentum to free up space for beans, but I do not believe it would come to a large-scale selloff,” Agrural’s Daniele Siqueira was quoted as saying.

“It would be something more concentrated in Mato Grosso, as there is little corn available in other states due to the safrinha crop loss, and even in Mato Grosso the amount of unsold corn is relatively small,” Siqueira added.

The shortage of silos and warehouses in Mato Gross was structural as the state had capacity to store up to 38M tonnes of grains and oilseeds from an estimated 2021/22 production of 77M tonnes, according to data from the country’s agriculture institute IMEA.

At a time of high demand, farmers in Mato Grosso had been complaining about the shortage of storage capacity and high storage costs at third-party facilities, AgriCensus wrote.

Meanwhile, funding to increase and improve storage facilities under the annual federal rural credit programme Plano Safra ran out in just over a month after the release of the 2021/22 programme, according to the report, with farmers unable to contract further volumes.

While Martins believed the lack of storage space could push corn spot sales up, putting pressure on domestic prices, Siqueira thought that storage issues were “secondary in the short term”, AgriCensus wrote.

“If we produce 144M tonnes of soyabeans and 118M tonnes of corn in the 2021/22 marketing year, storage may become a widespread problem ahead but that is not yet the case,” Siqueira added.