Corn growers unwilling to lower prices, which hit a nominal record in Brazil

Cepea, September 3, 2020 – Brazilian corn growers stayed away from the market in August, unwilling to fix prices with cooperatives and cereal processors. This behavior was linked to the harvesting in Brazil, the dollar appreciation against Real, the international valuation of corn and the faster exports pace. Purchasers needed to bid higher prices in order to attract sellers and close deals.

 

In this context, the ESALQ/BM&FBovespa Index for corn (Campinas, SP) increased by a staggering 20.6% between July 31 and August 31, closing at 61.25 BRL (11.18 USD) per 60-kilo bag on August 31. This is the highest nominal level in the series of Cepea, which started in 2004. As regards the real record in the series, of 73.20 BRL/bag, it was registered in December 2007 (monthly averages were deflated by the IGP-DI from July/2020).

 

In the corn-producing regions in Brazil, prices also hit nominal records in the series of Cepea, and at Brazilian ports, exporters were bidding for prompt-delivery, pushing up the prices to nominal records too.

 

With the high price levels, the Brazilian federal government announced the suspension of imports tariff on the corn from countries out of Mercosur. Still, agents do not expect high purchases from the international market, due to the strong dollar.

 

CROPS – Harvesting of the second crop ended in some Brazilian regions in August, while sowing of the 2020/21 summer crop began in some other areas. In Rio Grande do Sul, growers were still measuring the effects of the frosts from late August on crops. In Paraná, growers were harvesting the second crop and sowing the summer crop, since the weather was favorable to these activities. In Mato Grosso do Sul, the harvesting advanced, despite the rains in some regions in the state. According to Famasul, until August 21, the harvesting had reached 49.2% of the state area.

 

(Cepea-Brazil)

 

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