Prices drop most of the month, but end September on the rise in BR; Index hits a new record

Cepea, October 2, 2020 – Despite having dropped most of the month, corn prices ended the month on the rise in most Brazilian regions surveyed by Cepea. Valuations were mainly linked to higher demand at ports. Besides, purchasers from the interior of the country become more interested in closing deals in late September, while sellers were unwilling to lower asking prices, expecting higher valuations.

 

Thus, the ESALQ/BM&FBovespa (Campinas, SP) for corn rose by 3.9% between August 31 and September 30, hitting a new nominal record in the series of Cepea (which started in 2004) on the last days of the month, closing at 63.63 BRL per 60-kilo bag (11.33 USD/bag). It is worth to mention that the real record (considering the inflation) was registered in December 2007, when the Index averaged 76.11 BRL/bag (values were deflated by the IGP-DI from August/20).

 

Despite the valuations, the number of deals closed in September was low. The harvesting was ending in some regions from São Paulo, Mato Grosso do Sul and Paraná, but farmers were opting for stocking the product harvested. In Mato Grosso, Rio Grande do Sul and Santa Catarina, the volume available in the spot market was low, while in northeastern Brazil, purchasers were waiting for the harvesting to begin in some areas.

 

At Brazilian ports, despite the price drops, the demand from exporters was firm late in the month, influenced by the dollar appreciation against Real, by 5.3% in that period. For the coming months, purchasers may continue interested in closing new deals, and prices should remain firm.

 

EXPORTS – According to data from Secex, until the third week of September, Brazil had exported 4.55 million tons of corn. The daily average of shipments was at 350 thousand tons.

 

CROPS – In Paraná, according to Deral/Seab, 98% of the 2019/20 second crop had been harvested until Sept. 21. In Mato Grosso do Sul, 97.3% of the area had been harvested until Sept. 18, according to Famasul.

 

Brazilian corn farmers were concerned about the effects of the dry weather on the 2020/21 summer crop. Despite the rains in mid-September, Cepea collaborators believe that higher rains are necessary for sowing and plants development. A report from Seab/Deal released on Sept. 21 shows that 34% of the area estimated for Paraná State has been sown.

 

In Rio Grande do Sul, Emater indicates that sowing is at different stages among the regions surveyed. While in Erechim, 70% of the area has been sown, in Ijuí and in Santa Rosa, sowing was only taking place where soil conditions were better.

 

(Cepea-Brazil)

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