Upward trend of quotes weakens in Brazil; imports decrease

Cepea, September 17 2019 – The upward trend of wheat grain quotes, observed in the Brazilian market in early September, weakened by the end of the first fortnight, influenced by the harvesting in Paraná. As for the trading pace, although there were only a few batches of higher quality wheat available in the market, liquidity increased in that period too.


According to data released by the USDA in the second week of September, the global wheat production in the 2019/20 season should total 765.53 million tons, 4.7% up compared to that in the previous season. World wheat consumption may grow by 2.6%, and the inventory/consumption ratio should be at 38.1%. Global trades should be near 180 million tons in the current season – exports should decrease only from Kazakhstan and Russia, while imports from small countries should be lower too.


In Brazil, Conab (National Company for Food Supply) has revised up, by 0.2%, the area to be sown with wheat, to 2 million hectares. Productivity, in turn, should be 0.7% lower, at 2.64 tons per hectare, and the Brazilian output, so far, is predicted at 5.4 million tons, 0.5% smaller than the previous. Wheat availability in Brazil (initial inventories + production + imports) is estimated to total 13.4 million tons, consumption and exports, 12.74 million tons, with ending stocks in July/20 at 654.8 thousand tons.


FIELD – In Paraná, the harvesting has reached 28% of the total state area, according to Deral/Seab, and, until Sept. 9, almost 50% of the crops were in good conditions, 37%, in average conditions, and 14%, in bad conditions.


INTERNATIONAL TRADES – The Brazilian imports of wheat grain decreased in August, which may be linked to the slower crushing pace in the domestic market in the last months. Data from IBGE (Brazilian Institute of Geography and Statistics) indicate that wheat crushing and the production of by-products between January and July 2019 were at the lowest levels since 2002 (beginning of IBGE series for industrial production).


Between July and August, Brazil imported 12.8% less, according to Secex, totaling 486.6 thousand tons – compared to August 2018, that volume decreased a steep 23%.


Of the volume imported, most part came from Argentina, but the shares of this country, the United State and Uruguay in the total volume imported by Brazil decreased – of all the amount imported in August, 77.2% came from Argentina, 3.5%, from the USA, and 2.5%, from Uruguay. On the other hand, imports from Canada and Paraguay increased by 7.2% and by 9.6%. Brazilian wheat exports, in turn, decreased sharply, totaling slightly over 51 tons.





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