Despite weather problems, new estimates indicate record crop

Cepea, July 16, 2021 – Players surveyed by Cepea say that frosts in Brazil in early July did not affect most part of wheat crops significantly, given that they were at the initial developing stage. Because of that and due to the advance of planting activities, new official data reinforce expectations of higher area and record crop in Brazil. The advance in the planting, in turn, is related to high wheat prices, mainly between the fourth quarter of 2019 and the second quarter of 2020, which attracted players to the activity.

 

Prices upped in most regions surveyed by Cepea in early July because of dollar increases against Real, which pushes up imports prices. However, trades in the domestic market continued to move at a slow pace, due to low stocks from the crop before. Moreover, some purchasers were away from trades in Brazil, expecting price drops.

 

According to data from Conab, the area may increase 12.3% in 2021 compared to the previous, totaling 2.62 million hectares, the highest since 2014. Productivity is estimated at the record of 3.23 tons per hectare, 21.1% more in relation to that in 2020.

 

If these numbers are confirmed, production in Brazil may hit the record of 8.48 million tons, for a significant increase of 36% compared to the season before. As a result, imports may decrease 9.1% from August/21 to July/22 in relation to the period from August/20 to July/21. Still, the domestic availability (initial stocks + production + imports) is expected to reach 14.6 million tons, 11.7% more compared to the season before and the highest volume since 2016.

 

As for the domestic consumption, is forecast at 12.12 million tons, 0.2% more than in the current season. Exports are likely to hit 600 thousand tons, 29.4% below the volume projected for this season. Therefore, ending stocks by July/22 may amount 1.87 million tons, against 113 thousand tons in July/21.

 

IMPORTS – Secex indicates that, in June/21, wheat flour imports totaled 31.09 thousand tons, 38% up compared to the month before and an increase of 54.6% in relation to June/20. Wheat flour exports, in turn, hit 5.4 thousand tons in June/21, for a sharp increase of 90.5% compared to May/21 and 11.3% up in relation to June/20.

 

As for the wheat grain, Secex says that Brazil imported 540.87 thousand tons last month, -8.4% compared to May/21, but moving up 24.6% in relation to June/20.

 

(Cepea-Brazil)

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