Possible record output lead purchasers to press down quotes in Brazil

Cepea, June 17, 2020 – Corn prices dropped in the Brazilian market in the first fortnight of June, influenced by the pressure from purchasers, who are focused on the second crop harvesting. In spite of the sowing delay in some regions, the favorable weather at the end of crops development tends to boost productivity, resulting in a record output. The harvesting is still beginning, however, corn supply is already higher in the wholesale market.

 

In Campinas (SP), the ESALQ/BM&FBovespa Index for corn decreased by 6.4% between May 31 and June 15, closing at 46.96 BRL (9.12 USD) per 60-kilo bag on June 15.

 

ESTIMATES – Conab’s (Brazil’s National Company for Food Supply) estimates from the second week of June indicated that corn production may hit 100.99 million tons in Brazil, 0.9% more than that in the previous season and a record. Still, that volume is roughly 2 million tons below that forecast in May, because of the production decrease in the second and third crops.

 

The second crop is estimated at 74.23 million tons, 1.6 million tons lower than that reported in May. As for the first season, production is estimated at 25.42 million tons, and the third crop, at 1.33 million tons.

 

Export estimates continue at 34.5 million tons, 6 million tons less than that last year. As a result, ending stocks in January/21 are forecast at 9.89 million tons, 10% down compared to that in the crop before and the lowest since 2015/16.

 

CROPS – In Brazil, corn harvesting is advancing, favored by the dry weather. In Paraná, the area already harvested had hit 3% on June 8, according to data from Seab/Deral. In Mato Grosso, activities had reached 4.35% of the state area until June 5, according to Imea.

 

(Cepea-Brazil)

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