Harvesting advances, but high exports underpin quotes in BR

Cepea, July 2 2019 – Corn prices were dropping in early June, due to decrease in the demand for the cereal. Purchasers seemed to be stocked up, postponing new deals. Supply, on the other hand, was high, reflecting the harvesting advance in the main corn-producing region in Brazil – according to data from Conab (National Company for Food Supply), the domestic corn availability (initial inventories + imports + production) in the 2018/19 season should be a record, totaling 112.3 million tons.

 

Slightly prior to the second half of the month, however, quotes started to rise, boosted by the fast exports pace – as prices at Brazilian ports were lower than quotes in the USA and Argentina, the higher competitiveness of the Brazilian corn in the international market favored shipments.

 

In the first 14 working days of June (until June 21), Brazil exported 415.3 thousand tons of corn, almost three-fold (+190.8%) that from the entire month of June/18. Besides, unfavorable weather in the United States may damage corn crops in that country and favor sales from Brazil. Thus, in Campinas (SP), the ESALQ/BM&FBovespa Index for corn rose 0.75% between May 31 and June 28, closing at 38.85 BRL (10.13 USD) per 60-kilo bag on June 28.

 

FIELD – Weather conditions have favored second corn crops in most part of producing areas. Players surveyed by Cepea say that there are lines at warehouses to receive the product, mainly in Paraná and in the Central-West. Many purchasers say that the higher supply of corn and soybean deliveries have pushed up freight prices and brought difficulties for logistics.

 

In São Paulo, harvesting activities were moving at a slow pace in late June. In Paraná, Seab/Deral data indicate that 34% of the area had been harvested until June 24. In Mato Grosso, from June 14 to 21, activities reached almost 25% of the area, 7.81 percentage points higher than in the week before, according to Imea.

 

(Cepea-Brazil)

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