Second crop harvesting weakens prices in Brazil, but Index rises in May

Cepea, June 2, 2020 – The harvesting of the second crop corn started in some Brazilian regions in late May, which pressed down quotes in most of the areas surveyed by Cepea. Many purchasers were not interested in buying large corn batches, expecting prices to drop more sharply in the coming weeks. However, some other agents, with higher needs to replenish inventories, ended up paying higher prices for the product, limiting devaluations.

 

In general, prices oscillated among the regions surveyed by Cepea in the second fortnight of the month. While in the interior of Paraná, quotes were on the rise, in some regions from São Paulo and central-western Brazil, prices dropped slightly. This scenario was linked to the different market conditions among the regions surveyed, such as supply, demand and the weather – it is worth to mention that the lack of rains is concerning growers about the second crop development.

 

In that scenario, the ESALQ/BM&FBovespa Index for corn (Campinas, SP) rose by 3.8% in May, closing at 50.19 BRL (9.40 USD) per 60-kilo bag on May 29.

 

CROPS – In Paraná, corn harvesting started in some regions from central-western and southwestern state, having reached 2% of the area until May 25, according to data from Seab/Deral. Despite the rains in late May, crops productivity should be lower this season, estimated at 5.43 tons per hectare, 8% down compared to that last season. As regards crops conditions, until the end of the month, 41% were in good conditions, 43%, in average conditions, and 16%, in bad conditions.

 

In São Paulo, activities should only start in mid-June, but growers have already signaled a reduction in the trading pace for new batches. In Mato Grosso, a report from Imea released on May 22 indicated that the harvesting had reached 0.68% of the state area, estimated at 5.19 million hectares. The harvesting pace is slower than that last year, due to the late sowing in the current season.

 

In Minas Gerais and in Goiás, activities started too. Growers were concerned about the effects of the drought in crops productivity. In northeastern Brazil, some small volumes with lower quality corn were reported, but most batches delivered were in good conditions.

 

(Cepea-Brazil)

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