Porto Alegre, March 16, 2021 – Corn prices in Brazil remained firm and with new levels last week. This does not stem from the oscillation of the exchange rate and/or external prices but instead from regional supply difficulties. Fortunately, corn supply has continued, even at high prices. The trajectory until August is the doubt from now on, given the severe delay of the second crop and the adjustment of this supply until a better harvest pace of the second crop. Until then, we have the climate for the US crop in 2021 and the late 2021 second crop in Brazil.
Corn prices this semester confirm the general expectations for the period, such as:
– A harvest in the south of Brazil that has not been fast enough to pressure prices as it seasonally is;
– The harvest in the Southeast does not meet all the regional demand and need more prices to absorb distant and expensive lots;
– Weather situation that cut part of the summer crop in the South region and that also caused delay in the harvest of soybeans and planting of the 2021 corn second crop;
– Reasonable delays in the soybean harvest, severely complicating logistics and internal flow, with a sharp high in internal freight rates;
– No sign of a real retraction in the domestic demand to the point of offsetting the tight supply in the first half of the year;
– Some carryover stocks, which met part of the domestic demand in this first quarter;
– The only differentiated symptom of the period is the prices in Matopiba, pointing out that the production figures for 2020 may have been higher.
Corn prices reach new records throughout Brazil’s Center-South. In the South, BRL 82/85 in Rio Grande do Sul, BRL 85/87 in Santa Catarina, and BRL 85 to 90 in Paraná. In the Southeast, São Paulo hit BRL 90 in cash in the interior and BRL 96/98 CIF for ICMS-free corn. Minas Gerais registered BRL 80 in Triangulo Mineiro. In the Midwest, BRL 77/80 in Goiás, BRL 80 in Chapadão do Sul – MS and Mato Grosso with offers at BRL 68 to 75 per week. The second crop was indicated at BRL 60/62 in Mato Grosso to BRL 75 in Paraná. At the port, BRL 77/79 for August/September.
Now, the market has a supply trajectory until August because of the delay in the second crop planting. Of course, there will be harvest in June and July, however, perhaps that is insufficient to meet all domestic demand and bring down prices at export levels. This tends to occur only from August.
Agência SAFRAS Latam
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