Cepea, October 16, 2020 – Low corn supply in Brazil, sellers’ firm stance and high demand at national ports kept prices on the rise in the first fortnight of October in all Brazilian regions surveyed by Cepea. In some cases, cooperatives and consumers agreed to pay higher prices in order to close deals.
On October 15, the ESALQ/BM&FBovespa for corn (Campinas, SP) hit 70.30 BRL/60-kilo bag (12.53 USD/bag), 10.5% up in the fortnight. Thus, the Index is nearing the real record in the series of Cepea, of 78.62 BRL/bag, registered in December/2007 (values were deflated by the IGP-DI from Sept/20).
At ports, trading companies purchased high volumes in the first half of October, bidding prices from 2 to 3 Reais/bag higher than that in the interior of the country and, thus, hampering sales in the spot market even more.
2020/21 SEASON – According to Conab’s (Brazil’s National Company for Food Supply) first estimates for the 2020/21 crop, the summer crop is expected to total 26.76 million tons, 1.75 million tons higher than that in 2019/20. Although the area planted with corn has shrunk by 1.1%, productivity is expected to be 5.3% higher than that in the previous season, increasing estimates.
For the second 2020/21 crop, Conab estimates productivity to grow by 2.3% and area to continue stable, at 13.75 million hectares. Thus, production may hit 76.76 million tons, 2.3% higher than the previous. However, for the third crop, which is concentrated in northeastern Brazil, productivity and production are expected to be lower, by 7.4% and 7.6%, respectively – the output is forecast at 1.63 million tons. Thus, the 2020/21 crop is estimated at 105.16 million tons, 2.6% higher than the previous and a record.
Exports were revised up to 35 million tons, 500 tons higher than that in the 2019/20 crop, while imports should continue stable, at 900 thousand tons. Consumption in the Brazilian market should grow by 3 million tons between the current and the next crops, reflecting the demand from the national livestock sector. Thus, by the end of the season (in January 2022), Conab estimates inventories to be at 9.67 million tons, 14% lower than the average in the last five seasons and below the volume forecast for the current season (January/21), at 10.43 million tons.
CROPS – Sowing of the 2020/21 crop is advancing in Brazil, despite the low rains. In Paraná, data from Seab/Deral from Oct. 5 indicate that 65% of the first crop corn has been sown.
In Rio Grande do Sul, rains favored activities in Erechim and Bagé. On the other hand, in Ijuí and Santa Rosa, low soil moisture is hampering sowing. Thus, around 60% of the area has been sown in RS, according to Emater/RS.