Porto Alegre, August 11, 2020 – The Brazilian corn market continues to rise at a surprisingly high rate during the harvest, even without having an important international factor to promote a sustainable fundamental for this situation. In general, these bullish indicators in harvest periods occur due to external variables, such as in 2019, when the surge on the CBOT created an avalanche of exports by Brazil and supported prices. In 2020, international prices are down at the lows, and there is no great external ingredient to consolidate this internal movement. So, the growers’ focus on retaining a good part of the second crop at this moment is clearly noticeable, and the dispute between internal consumers and exporters is consolidating support to highs at the harvest of the second crop.
In 2019, the surge in Chicago from USD 3.50 to USD 4.70/bushel in just thirty days, due to difficulties in the U.S. planting, caused a great additional demand for Brazilian corn. With this, Brazil could sell its record 2019 crop with record exports of 41 million tons, making significant shipments throughout the second half.
In 2020, the pandemic caused sharp losses in international prices, besides halting the expectations towards global demand in the face of the economic crisis. Brazil, in this phase of the pandemic, was the market that was ‘always open’ and presented a strongly devalued exchange rate in its favor. Trading companies may have taken advantage of the moment to make heavy sales in the international market.
Agência SAFRAS Latam
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