“The second crop, which is currently being harvested, may have some issues with quality in a few specific areas, but overall is in good condition,” the USDA noted in its report. “This year, the second crop will make up about 67% of the total corn crop in Brazil. Storage options may be limited, however, due to record corn and soybean crops competing for the same space.”

On the trade front, the USDA said 2016-17 corn imports are forecast at 500,000 tonnes due to a record domestic crop, while 2017-18 imports are estimated at 300,000 tonnes, reflecting large carryon stocks. Corn exports for the 2016-17 market year are estimated at 32 million tonnes, the USDA said in the report, up substantially from 2015-16 as a result of better-than-expected rains at the end of the rainy season. Exports for the 2017-18 market year are forecast at 30 million tonnes, the USDA noted.

Wheat production for the 2017-18 market year in Brazil is forecast at 5.6 million tonnes, down 17% from a record 6.73 million tonnes in 2016-17, according to the USDA. The year-over-year decline reflects a return to normal yields in Brazil, the USDA said.

Brazil’s wheat trade, meanwhile, is on the rise. The USDA said Brazil expects to import 6.8 million tonnes of wheat in 2016-17 and 6.9 million tonnes in 2017-18, reflecting increased demand for high quality wheat.

“Recently, the president of the Brazilian Wheat Millers Association (ABITRIGO) told reporters that he is concerned that the quality of Argentine wheat has fallen, and that Brazilian millers are looking to receive higher quality wheat from Argentina this year,” the USDA noted in its report.

The USDA indicated in its report that Brazil’s wheat exports are forecast to climb to 800,000 tonnes in 2016-17 and to 1 million tonnes in 2017-18.