Firm demand boosts prices in Brazil in January

Cepea, February 4, 2020 – In January, corn prices increased in most of the Brazilian regions surveyed by Cepea, reflecting the firm demand for the product (since many purchasers need to replenish inventories). On the other hand, the trading pace was slow. As regards supply, it is still low, mainly in southern and southeastern Brazil.

 

Late in the month, the upward trend of prices lost strength – purchasers did not seem very interested in trading large batches and were waiting for the harvesting of the first crop to advance in order to close new deals.

 

Besides, sellers were more interested in trading the cereal, due to the current price levels in the Brazilian market and/or needs to make room in warehouses – to stock soybean.

 

Between December 30 and January 31, the ESALQ/BM&FBovespa Index (Campinas, SP) rose 5.2%, closing at 51.16 BRL (11.94 USD) per 60-kilo bag on January 31.

 

FIELD – In Rio Grande do Sul, according to Emater (RS), rains in late January brought some relief to growers, since they recovered some of the damages caused by the drought, improving crops conditions. Thus, the average productivity should be revised by the end of the season, which is underpinning prices at high levels in the current crop.

 

In Minas Gerais and in São Paulo, rains hampered the harvesting, which came to a halt on some days. In Paraná, according to the agents consulted by Cepea, precipitation was not enough to delay the summer crop harvesting and the second crop sowing. Deral/Seab indicates that 2% of the area had been harvested until Jan. 27. Sowing of the second crop advanced to 4% late in the month.

 

In central-western Brazil, where the soybean harvesting is at a fast pace, corn sowing stepped up. Data from Imea/MT indicate that 9.8% of the area has been sown.

 

(Cepea-Brazil)

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