Prices differ among Brazilian regions; liquidity is low

Cepea, November 17, 2020 – Corn sales were slow in Brazil in the first fortnight of November. With prices at high levels, purchasers were only buying low amounts. These agents are also aware of the dollar depreciation against Real, which may reduce their interest in exports.


Many sellers continued away from the market, expecting the interest of purchasers in replenishing stocks to increase. Besides, corn farmers have been worried about the current unfavorable weather and the possible lower output in the summer crop. Thus, prices followed opposite trends among the regions surveyed by Cepea in the first half of the month, reflecting the different market conditions in each one of them.


In Campinas (SP), the ESALQ/BM&FBovestpa Index for corn dropped by 1.4% between October 30 and November 13, closing at 80.74 BRL (14.74 USD) per 60-kilo bag on Nov. 13.


Exports have been firm, despite the lower demand from the international market. In the first week of November (4 working days), Brazil exported 1.15 million tons of corn, with a daily average at 289.9 thousand tons. However, the dollar depreciation against Real, by 4.7% in the first half of November, to 5.477 BRL on Nov. 13, lowered export value.


ESTIMATES – According to a report from Conab (Brazil’s National Company for Food Supply) released in the second week of November, production estimates for the Brazilian summer crop were revised down, while for the 2020/21 second crop, estimates were kept stable – both compared to that reported in October. This is linked to the unfavorable weather during corn sowing and crops development, primarily in southern Brazil.


Now, production estimates for the summer crop are at 26.48 million tons, almost 300 thousand tons down from that reported in October. For the second and third crops, estimates were kept at 76.76 million and at 1.63 million tons, respectively. Thus, the output in the 2020/21 season is predicted at 104.89 million tons, 0.25% down from October, but still a record.


Conab’s estimates for corn exports were also kept stable, at 34.5 million tons in the 2019/20 season and at 35 million tons in the 2020/21 season. Imports are predicted at 950 thousand tons and at 900 thousand tons, respectively. If these estimates are confirmed, ending stocks in the 2019/20 season (in January 2021) would total 10.49 million tons, and in the 2020/21 season (in January 2022), 9.45 million tons, following the downward trend observed in the two past seasons.


CROPS – In the first fortnight of November, weather conditions differed among the regions that grow the summer crop. While in southern Brazil, the lack of rains has been a concern, in the southeastern and central-western regions, precipitation brought some relief to farmers. In Paraná, until November 9, corn sowing in the 2020/21 first crop (summer) had reached 95% of the total estimated, according to data from Deral/Seab. Of the crops already sown, 74% were in good conditions, 22%, in average conditions, and 4%, in bad conditions.


In Rio Grande do Sul, the lack of rains was hampering activities and the development of the crops already sown, according to Emater/RS. A report released on Nov. 12 indicated that 78% of the area allocated to the first 2020/21 crop has been sown.


In São Paulo and in central-western Brazil, rains favored sowing. According to Conab, 50% of the total estimated for SP, 75% for Minas Gerais and 30% for Goiás had been sown until Nov. 9.





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