Index drops more than 6 pct in the first fortnight

Brazilian corn prices kept decreasing in the first fortnight of August, pressed by the harvesting progress, the lower exports and the decreasing international quotations. Between July 31st and August 15th, the ESALQ/BM&F Index (Campinas region - SP) dropped 6.3 percent in Real, closing at 24.05 reals or 14.68 dollars per bag of 60 kilos on Aug 15th.

Even with the domestic trades remunerating more than exports, Brazilian corn market keeps moving at a slow pace. Buyers remain retreated, waiting for lower values. Sellers, in turn, bet on stable or higher prices from September on (off-season period).

In July, Brazilian corn exports totaled 377.5 thousand tons, volume slightly higher over that exported in June (364.3 thousand), but inferior compared to July/07 (1.03 million tons) - Secex (Foreign Trade Secretariat). In the accumulated of this year, exports are 21.6 percent lower than the volume registered in the same period 2007.

According to some agents, Brazilian corn exports should total roughly 6 million tons in 2008, inferior from the volume of 11.5 million forecasted by Conab (National Company for Food Supply). The domestic demand is estimated at 44.5 million tons. Based on these data, it remains around 8 million tons of the grain from the 2007/08 crop to be traded, plus 6.6 million of inventories from previous crops. In this context, only an expressive and continuous increase in international values should attract exports and, as a result, reduce the domestic supply.

Concerning the Brazilian summer production (2007/08), the productivity increased 7.5 percent compared to the previous crop, reaching 5,154 kilos per hectare. The planted area enlarged 1.6 percent and the production, 9.5 percent (to 40.1 million tons) - Conab data. For the winter corn crop, the productivity may rise 13.4 percent in relation to the previous crop, the area, 9.8 percent and the production, 24.5 percent, totaling 18.4 million tons. Adding, the Brazilian 2007/08 corn crop production should total 58.5 million tons, favored by the increase in the area (4.3 percent on average) and in the productivity (9.1 percent). (Cepea - Brazil)

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