Porto Alegre, August 29, 2022 – Brazilian market of corn changes environment with CBOT highs. Domestically, the scenario continues with a large volume of second-crop corn stored in warehouses and awaiting better prices to be sold. The exports variable continues to weigh on the composition of domestic prices, and last week’s profile of the crop tour brought a speculative movement to the CBOT with reflections on the prices of Brazilian ports. The improvement in prices at ports helped the business pace from Paraná to Maranhão. Producers, based on information about a crop with signs of problems and highs in Chicago, avoided offers of great lots.
The rain in southern Brazil for the last ten days has hindered the planting in Rio Grande do Sul and Santa Catarina. As of this week, Safras & Mercado begins to count the planting rhythm of the summer crop of corn. So far, the rain is coming at the right time so that the early planting in Missões is underway, and the crops already planted have a good development. For this August closing, however, there is a risk of frost in both states, a situation that could cause some replanting.
While this summer crop variable still does not receive the attention it deserves, the domestic market focuses on two points:
– The price progress on the CBOT;
– The rhythm of prices at the port and flow of exports.
The movement created last week with the private evaluation of the US crop helped to increase port prices in Brazil. The market worked between BRL 86/88 for September and jumped to 92 for this shipment. A good volume of business occurred with lots in Mato Grosso do Sul, Paraná, Mato Grosso, and Goiás. In Maranhão and Piauí, business increased to BRL 75/78, in longer terms at up to BRL 80 in exports. The market calculation is for deals involving one mln tons, at least for export over the week. It seems that growers have taken advantage of these moments of better price conditions.
This year, Brazil is accumulating close to 20.8 mln tons between February and September. September already has 3.3 mln tons scheduled, while August could set a record with more than 7 mln tons. The trajectory of shipments will likely accumulate 24/25 mln tons between February and September, leaving October through January to reach the 37 mln tons projected for the year. The final numbers can exceed by far this projection. However, one cannot project something that does not yet have a rhythm for confirmation. October shipments could offer this symptom for volumes of 40 mln tons or perhaps even more for the business year.
The fact is that the international environment with losses in the United States, Europe and now southern China collaborate to maintain the demand for Brazilian corn. If there is a need to contain US exports to preserve stocks, we may have additional demand in the last four months of the business year for Brazilian corn. What should not be expected is that Brazil can quit exporting from February onward with a record soybean crop appearing in Brazil.
From now on, the final data on the US crop and its harvest within ten days, the pace of Brazilian exports, and the weather in the summer crop will bring price formation variables to the domestic market. Always emphasizing that we still have two important points ahead for the domestic market, namely, the maturation of debts of producers on September 30 and the need to empty warehouses for the arrival of the soybean crop in February.
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