Smithfield Buying Brazilian Corn
Smithfield Foods Inc. is buying Brazilian corn, Reuters reports.
Citing anonymous sources, Reuters says Archer Daniels Midland Co and other grain traders are selling corn to Smithfield as wet weather has reduced U.S. corn plantings.
Smithfield Foods is the largest pork producer in the world and is a wholly owned subsidiary of WH Group of China. WH Group purchased Smithfield Foods in 2013 for $4.72 billion.
Reuters sources, who requested anonymity to discuss sensitive market information, said Smithfield owns port facilities on the U.S. east coast and sometimes buys corn abroad because of the cost of shipping grains from the domestic corn belt.
“We are just finding a destination for Brazil corn and supplying those who know there will be a shortage ... Just being faster and nothing else,” said a third source close to ADM.
One source said Smithfield Foods likely ordered between five and 10 corn shipments from Brazil, which are expected to be loaded onto ships between September and January.
The other source said Paraguay and Argentina are also shipping corn to the United States, with around 1 million tonnes now under contract for shipment from South America to the United States.
USDA’s crop progress report released Monday, revealed that only 67% of the country’s estimated 92.8 million acres of corn have been planted by June 2. That means farmers have 31 million acres of corn still to plant. The five-year average for this week of the growing season is 96% of corn planted.
Related stories:
Crunch time: 31 Million Corn Acres Unplanted
