Internal market of corn reacts to situation in southern Brazil

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     Porto Alegre, January 17, 2022 – The supply in the first half of the year in the Brazilian market will be 21.6 mln tons plus the discreet 3 mln tons of carryover stocks from 2021 to 2022. This assessment needs to be very clear for the domestic market to assess the risks of shortages. The belief that Brazilian stocks are above 10 mln tons, as some market sources have informed, is an erratic vision that distorts the supply picture.

     Early 2022 has started as expected. A strong resumption in demand and higher sell prices. As states are still in the last month of the business year and soybeans have not yet entered strongly into their harvest rhythm, corn offers have still emerged even at higher prices and managed to meet demand and short-term supply. From now on, soybeans will advance in their harvest, freight and logistics. The corn harvest will occur after the soybean one. Corn harvest will be regional, and the best crops from Goiás, Minas Gerais and Bahia will appear more uniformly in April.

     Meanwhile, Brazilian exports maintain a projection of 2.6 mln tons in January and have an accumulated potential of 21.5 mln tons in the business year. At this point, it is important to reflect that from February until the beginning of the second crop, there is no washout by trading companies, imports remain expensive, and domestic supply will be narrow until the second crop. The harvest of the second crop will arrive earlier this year, so at the end of June and July, we will already have second-crop offers, in a better situation than that registered in 2021, when the harvest only arrived in August. Ensuring supplies until July is the challenge for the domestic market, regardless of external conditions.

     Agência SAFRAS Latam

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