Porto Alegre, May 30, 2023 – In 2022 we had an amazing international market of corn in terms of prices and demand for Brazilian corn, at high levels. In 2023, the big risk is the US crop, and any risky weather movement could bring opportunities for the Brazilian market to accelerate sales. This is because with a second corn crop of this size, we will need to substantially leverage the flow of shipments.
A record summer soybean crop followed by a record second corn crop, a condition that has already greatly affected soybean premiums and neutralized Argentina’s losses. Without a big new external variable, can we say that this will also be a situation for corn in this 2023 second crop? Well, the Brazilian logistics have a challenge in the next 90 days, which will be giving flow for the start of the second-crop corn harvest. It seems that Mato Grosso is already more aware of the situation and selling second crop in a more intense way, and so is Goiás. However, the other states are still waiting for something that changes the price profile.
The price movement on CBOT over the week to USD 5.20/bushel may seem accentuated by the fact that the market is oversold. However, this regional drought should not last beyond June 10 in the eastern Midwest, the rains are expected to return, and the market should go down again. This means that Brazil, with these still present soybean stocks and a giant second corn crop coming up, will need port flow. Domestic demand will absorb part of it, of course, but it will not be able to deal with 98 mln tons.
This means that if the CBOT prices manage to gain some more momentum for hikes this and next week, the moment should be seized to leverage exports. Hitting 47 mln tons again in 2023 at low prices, with a record US crop ahead and ports still shipping too many soybeans, will be much more difficult in 2023. In 2022, we shipped 1 mln tons in June. Right now, we have nearly 500,000 tons registered to be shipped next month.
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