Domestic corn prices start to pick up again at this year beginning, following dry weather in South America. In addition, higher exports in late 2008 contributed to reduce the volume available of the grain - even so, Brazilian stocks are the highest ever. Growers keep retracting.
On Jan 15th, the ESALQ/BM&FBovespa Index (Campinas region) closed at 23.92 reals or 10.04 dollars per bag of 60 kilos, up 12.4 percent in Real from Dec 30th, the highest monthly increase since Nov/07.
In Parana state, the main producer, the estimated loss is of 50 percent in some regions, due to the drought. Even the rainfall of the last days cannot recover yield. In general terms, corn supply is low in the South and Southeast of the country. On the other hand, in the Center-West, also an important producing area, supply is high and rainfalls have been favorable to corn production.
At the Chicago Mercantile Exchange (CBOT), corn futures dropped during the first fortnight, due to the latest USDA report released on Jan 12th, which showed higher global inventories in 2008/09 corn crop, compared to December estimate. The reasons are superior production, especially in China, and lower consumption, principally in the United States. The contract March/09 downed 5.3 percent in the fortnight, to 3.7525 dollars per bushel on Thursday.
According to USDA, the global 2008/09 corn production was boosted to 791.04 million tons - similar to 2007/08 season - and the consumption was reduced to 783.22 million tons - up 1.4 percent from 2007/08 crop. Ending stocks should increase 6.1 percent in relation to the previous crop - in December report, the USDA estimated decrease of 3.4 percent. (Cepea - Brazil)