Supply is limited; prices remain hitting records

Cepea, April 16, 2021 – Corn prices continued to hit record levels in most regions surveyed by Cepea in early April. In important producing areas, quotes were the double of the value registered in the same month in 2020.


The low supply in the national spot market explains price rises. Producers limited trades, concerned with possible weather impacts on the second crop production. Only a few batches were offered in Goiás and Minas Gerais, but they were not enough to limit price rises.


Consumers, in turn, were concerned with price levels, which were in general higher than costs of production in early April. Purchasers who needed to rebuild stocks reported difficulties to find new batches and those who were able to do it faced high values.


The ESALQ/BM&FBovespa Index for corn (Campinas, SP) rose by 4.2% from March 31 to April 15, closing at 97.64 BRL/60-kilo bag on April 15, a new real record of Cepea series.


FORECASTS – Conab indicated that the 2020/21 corn production may hit the record of almost 109 million tons. The summer corn crop is likely to amount 24.51 million tons, 4.6% down in relation to 2019/20 and the lowest in 29 years. The second crop, in turn, may total 82.6 million tons, 10.1% above the previous season, while the third crop continues estimated at 1.84 million tons, 0.1% up in relation to the year before.


Considering initial stocks and production, the total availability will be 120.56 million tons. Due to the good pace of exports and the domestic consumption forecast at 72.14 million tons, by the end of the season, inventories are likely to total 13.41 million tons, for an increase of 27% compared to the crop before.


Despite sharp price rises and the consequent lower competitiveness in the international market, Conab kept the corn exports estimate at 35 million tons (from Feb/21 to Jan/22), practically the same amount registered in the 2019/20 season, of 34.89 million tons. Imports, in turn, are expected to hit 1 million tons in the same period, 31% down compared to 2020.




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