The world’s biggest corn exporters are preparing for a showdown.

Brazilian farmers are in the midst of collecting their biggest corn harvest ever and American supplies are also plentiful — setting the stage for a stiff battle to win world buyers in the second half of the year.

It’s a turnaround from just a year ago when U.S. exporters were seeing sales boom as a drought plagued Brazil’s fields. This year, the South American growers enjoyed much better weather and crop supplies have gotten so big that farmers are already short on storage after collecting a massive soybean harvest just a few months earlier. That’s giving exporters incentive to push corn shipments out quickly and could mean a squeeze for hedge funds that are betting on a price rally.

“Buyers rule in the global corn market this season,” Pedro Dejneka, a partner at Chicago-based MD Commodities, said in telephone interview. “Competition between the two major exporters will be tough.”

Japan and Mexico are expected to be the biggest corn importers this season, according to the U.S. Department of Agriculture.

Prices Drop

December corn futures on the Chicago Board of Trade have dropped 1.8 percent in July to $3.85 a bushel as of 10:59 a.m. in New York. While the ample supplies and shifting U.S. weather patterns dragged prices lower, the declines were a surprise to hedge funds, who were positioned for gains.

Money managers increased their net-long position, or the difference between bets on a price increase and wagers on a decline, by 2 percent to 106,815 futures and options contracts in the week ended July 25, according to U.S. Commodity Futures Trading Commission data. The next day, futures fell to the lowest in almost a month.

Brazil’s corn production in the 2016-17 season is forecast to surge 45 percent from a year ago to a record 97 million metric tons, according to the USDA. The agency estimates that the 2016 U.S. harvest reached an all-time high and that the crop gathered this fall will be the second-bigger ever. The USDA will make its first survey-based estimates of U.S. production in August.

Competition has ramped up for farmers in the U.S., the world’s biggest grower and exporter. Brazil, which barely shipped any corn just two decades ago, has since emerged as a significant competitor. Sales are also on the rise from Argentina, which reaped a record harvest this season.

Brazil’s shipments normally climb at this time of year, the heart of the country’s winter harvest, and its expected exports are the highest ever, according to vessel line-up figures through 2013. U.S. growers will collect their next crop between September and November.

Storage Crunch