The first fundamental point for the second semester in this environment of the corn market is the U.S. crop. Estimates have been made by USDA, the planting is reaching its final stage, the planted area will be revised on June 30, and what remains from now on is the climate factor. The demand variable is important, of course, even more so this year. However, demand is already considered in the optimistic forecast for the 2020/21 cycle. The point that could help in this environment is the export in increasing volumes, a number that has not improved in weekly reports, which therefore does not allow CBOT prices to detach from the lows at USD 3.10/3.20. Could a full crop put prices at USD 2.80 a bushel? That may happen if the sector’s demand does not recover again.
The US government created a COVID bonus to local producers of USD 0.32/bushel for corn and 0.45 for soybeans. Besides the trade war compensation, producers will receive the COVID bonus for the damage caused to the market in the first half of 2020, that is, for the 2019 season. The major concern of global food security agencies is that low commodity prices may discourage production and generate a wave of global shortages in a sequence in the coming seasons. In Brazil, exchange rate devaluation is promoting this compensatory variable in relation to producer prices since the government has no financial conditions, and there is no funding generated for this kind of compensation.