Cepea, July 16, 2021 – Prices increased in most regions surveyed by Cepea in the first fortnight of July. Sellers limited the supply of new batches in the spot market due to uncertainties about the productivity. Official data released in the second week of the month highlighted losses caused by weather problems in this 2020/21 crop.
In this scenario, the ESALQ/BM&FBovespa Index for corn (Campinas, SP) surpassed 98 BRL per 60-kilo bag. On July 15, the Index closed at 98.01 BRL (19.12 USD)/bag, for an increase of 9.42% compared to June 30.
A report released by Conab on July 8 confirmed a 10.8% decrease in the 2020/21 second crop production compared to the previous, and it is now estimated at 66.9 million tons, 2.98 million tons less in relation to the report released in June. The result is attributed to the lower national productivity (-17.5%) compared to the season before.
The sharp productivity reduction in the second crop is a result of lack of water in most producing areas and of frosts in Paraná and in Mato Grosso do Sul. Conab projects decreases of 17%, 31% and 18.6% for productivity in the Central-West, Southeast and South. Therefore, the second crop production is likely to shrink 10.5% in the Central-West, 27.5% in the Southeast and 9.9% in the South.
As for the third crop, Conab reduced the estimate to 1.5 million tons, downing 18.4% compared to the year before, due to the 21.6% decrease for the average productivity.
Considering initial stocks and production, the 2020/21 crop availability is now forecast at 106.3 million tons. The consumption is likely to hit 71.3 million tons. Exports and imports were kept at 29.5 and 2.3 million tons, respectively.
Thus, by the end of the season, inventories are estimated at 5.46 million tons (the lowest volume since the 2015/16 crop), 48.4% less than in the season before. This scenario of firm demand, uncertainties regarding the productive potential and low stocks keep perspectives of high prices in 2021.