Porto Alegre, February 9, 2021 – Still subject to corrections by the official Brazilian export registration agency, Secex, the preliminary number of Brazilian corn shipments in 2020 was 35.07 million tons. Within the range of expectations, but perhaps facilitated by the decline of prices in the Brazilian market in December, a fact that may have accelerated some exports. In any case, the result does not change at all the profile for the beginning of the 2021 business year.
What really begins to surprise is the volume to be shipped in February, already at 500 thousand tons at a time of record prices for the period and risks of shortage. The theme extends to 2021 in view of significant prices in the international market, which may be inducing trades in the international environment that are not visible in the normal flow of everyday business. In other words, we can reach the second half of the year with more exports than currently expected for this new business year.
The new high set on the Chicago Board of Trade (CBOT) this week confirmed what most traders expected: a new wave of purchases by China in the US market, which reached 6.15 million tons and drove total US weekly sales to 7.44 million tons. This new flow may force USDA to raise once again the projection for US annual exports and support CBOT prices until the 2021 crop is confirmed.
This picture brings a new discussion on the planting of the 2021 US crop, regarding how much the US growers will decide to increase their area, setting the trends for both corn and soybean prices. Meanwhile, Brazil is coping with a strong delay in the planting of the second crop, which must occur if the Brazilian off-season is prolonged until July.
Agência SAFRAS Latam
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