Brazilian corn output may set a new record; domestic prices continue on the rise

Cepea, March 17, 2021 – Despite the delay in the harvesting of summer crops and the concerns about the development of the second crop, official estimates released in the second week of March pointed to the possibility of a new record output in Brazil. In the spot market, Cepea surveys show that liquidity continued low in the first fortnight of March, still, corn prices increased in all the regions surveyed.

 

ESTIMATES – Data from Conab (Brazil’s National Company for Food Supply) released in the second week of March showed that the Brazilian corn production in the 2020/21 season may total 108.7 million tons, 5.4% higher than that in the previous season and a record. This scenario results from the increases in the areas of first and second crops in the 2020/21 season, besides the use of new technologies, which offset the effects of the weather and sowing delay, majorly in the second crop.

 

Considering the three crops, Conab estimates the corn area to total 19.5 million hectares (+5.2% compared to that in the previous season) and productivity at 5.54 tons per hectare (+0.2%).

 

As for the demand for corn, Conab estimates 72.15 million tons will be consumed in Brazil and 35 million, exported. Thus, ending stocks increased by almost two million tons compared to that estimated last month, to 11.75 million tons (in January/2022).

 

DOMESTIC TRADES – The trading pace for corn has been slow in Brazil, due to the absence of sellers in the market. In southeastern and southern Brazil, farmers expect prices to rise more, based on the current low availability; in the central-western region, many farmers are focused on the harvesting of summer crops and/or sowing second crops. Purchasers claim difficulties to rebuild inventories.

 

Between February 26 and March 15, the ESALQ/BM&FBovespa Index for corn (Campinas, SP) increased by 7.9%, closing at 92.17 (16.33 USD) BRL per 60-kilo bag on March 15 – near the real record registered on November 30, 2007, now updated to 92.33 BRL/bag.

 

CROPS – With the weather more favorable to crops in southern Brazil, the harvesting pace for summer crops was faster in the first half of March. Sowing of second crops was advancing, but farmers from some areas in central-western reported one-off difficulties, due to the high rainfall in that period.

 

In Paraná, data from Deral/Seab released on March 8 indicate that sowing has reached 43% of the area forecast for the second season. The harvesting of the first crop corn has reached 53% of the area. In Rio Grande do Sul, Emater reported that the corn harvesting has reached 60% of the state area, according to a report released on March 11, with rains favoring beans development.

 

In Mato Grosso, farmers were concerned about the delay in the harvesting of soybean, since the ideal period for corn sowing ended in late February. However, up to March 5, 73% of the state area had been sown, according to Imea. In Mato Grosso do Sul, sowing had reached 32.5% of the estimated area up to March 5, according to Famasul. In Goiás, sowing was at 55% of the expected area, according to Conab.

 

(Cepea-Brazil)

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