Even with record production, prices keep firm

Brazilian corn prices kept firm during the first fortnight of May, even with a record production in this crop (2007/08). On Thursday, May 15th, the ESALQ/BM&F Index (Campinas region) closed at 27.89 reals or 16.80 dollars per bag of 60 kilos, increasing 1.86 percent in Real over April 30th. The support comes especially from the uncertainty about the winter corn crop productivity, the higher demand and from growers' retreat. Moreover, grain exports have been rising in the first months this year, with international values at record levels.

According to the National Company for Food Supply (Conab) report published on May 8th, the corn productivity in the summer crop reached 4.1 tons per hectare, a record. The Brazilian production should raise 8.2 percent, at 39.6 million tons.

The harvesting of the summer corn crop is almost finished. For the winter crop, activities have already started in the Paraná state, however, at a slow pace. The planted area is expected to increase 9.2 percent in Brazil. If the weather conditions keep positive, the productivity should raise 13.3 percent, at 3.7 tons per hectare, also at a record level. In this context, the winter corn crop production is projected to enlarge 23.8 percent, at 18.3 million tons. Last days, lower temperatures and frosts in some regions of the South have concerned growers. For a while, however, agents remain optimistic. (Cepea - Brazil)

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