Cepea, April 1st, 2021 – Corn prices increased in most Brazilian regions surveyed by Cepea in March, boosted by high demand and lower supply in the domestic spot market.
Although the harvesting of summer crops is advancing in Brazil, purchasers reported difficulties to close deals during the month. With prices at record levels, many farmers were only selling small volumes – it is worth to mention that these agents did not report storage issues. Sellers expect prices to rise even more, based on the low availability in the spot market, uncertainties about the second crop harvest and the strong dollar.
In March, the ESALQ/BM&FBovespa Index for corn (Campinas, SP) set a real record in the series of Cepea, closing at 94.40 BRL (16.37 USD)/60-kilo bag on March 29 (the series was deflated by the IGP-DI from Feb/21). On March 31, this Index closed at 93.71 BRL (16.66 USD)/bag, 9.7% up from that on February 26.
SECOND CROP – Deals for the second crop corn were sporadic in March. Consumers were interested in buying at least some corn for the second semester, but farmers were limiting deals, watching for the weather and uncertain about the output from the second season.
It is important to mention that, with the sharp price rises in Brazil, sales in the domestic market were more attractive than exports in March, which reduced the number of deals with the international market.
IMPORTS AND EXPORTS – In light of the low corn supply in the Brazilian spot market, agents consulted by Cepea are beginning to consider an increase in imports, majorly in southern Brazil, due to simpler logistics. In the first 15 working days of March, Brazil imported 74.2 thousand tons of corn, 0.36% up compared to that in March/20, but much lower than that from Feb/21 (290 thousand tons), according to data from Secex.
On the other hand, Brazilian corn exports have started to slow down, since sellers are prioritizing soybean shipments and prices at ports are not as attractive to Brazilian sellers. According to Secex, in the first 15 working days of March, Brazil exported 292.9 thousand tons of corn, less than the 822 thousand tons from Feb/21 and the 495 thousand tons from March/2020.
CROPS – In late March, sellers were waiting for new valuations and, thus, limiting supply – these agents are currently focused on ending sowing activities. In Mato Grosso, sowing of the second crop was about to end in late March. Data from Imea released in the week between March 22 and 26 indicate that 97.57% of the area had been sown.
In Paraná, while the harvesting of summer crops has reached 74% of the area, sowing of second crops was at 88% of the estimated area, according to data from Deral/Seab from March 22. New estimates for the 2020/21 season have been released too: the output from the summer crop is forecast at 3.072 million tons, 14% down from that in the previous season; for the second crop, however, an increase of 12% is estimated, and the output may total 13.38 million tons.
In Mato Grosso do Sul, the weather was favoring sowing in late March, which had reached 63.2% of the state area until March 22, according to Famasul.
In Rio Grande do Sul, rainfall was helping developing crops. According to Emater/RS, 65% of the state area had been harvested until March 25. Official estimates released in late March indicate that, despite the 2.97% decrease in productivity, the 5.94% increase in the area allocated to corn should lead to an output of 4.32 million tons, 4.16% up from that in the previous season.