Domestic prices moved down again

Last days, buyers were even more retreated in the Brazilian corn market, since they are enough supplied for until the beginning of 2008. Sellers, in turn, were more willing to trade. The result was decreasing prices. The ESALQ/BM&F Index (Campinas region) dropped 2.2 percent. In Real between Nov 30th and Dec 14th, closing at 33.76 reals or 18.79 dollars per bag of 60 kilos on Friday, Dec 14th. Moreover, a lower volume has been exported in this month. Even thought, corn exports should overtake the quantity of the same period of the previous years.

According to the National Company for Food Supply (Conab), the Brazilian 2007/08 corn crop area should increase 1.9 percent in relation to the 2006/07 one, totaling 9.7 million hectares in the summer crop. Regarding the productivity, the Conab forecasted 3.9 tons/hectare - slightly higher than in the previous season. In this way, the summer crop production should amount to 37.3 million tons. Exports of the product from the 2007/08 crop should reach around 8 million tons. From January to November this year, it was exported 10 million tons of Brazilian corn.

In the international market, the expectancy of a crescent corn demand boosted the values. At the Chicago Mercantile Exchange (CBOT), quotations for December upped 9.2 percent from Nov 30th to Dec 14th, returning to the level of 419 dollars per bushel, which was not observed since February this year. The upward trend in other markets, like the soybean and wheat ones, also supported corn values.

In the last USDA report about the global supply and demand, the production was forecasted at 769.3 million tons in the 2007/08 crop, lower than the volume estimated by the Department in November. The global consumption should total 766.4 million tons, higher than that forecasted in November, reducing the global stocks.


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