Cepea, July 16, 2020 – While sellers were limiting corn supply in the Brazilian market in the first fortnight of July, purchasers were interested in buying new batches. Thus, corn prices continued to increase in most of the regions surveyed by Cepea. At ports, prices were firm too, underpinned by the higher interest of international purchasers on the Brazilian corn. Liquidity, however, was low.
In the first half of July, the ESALQ/BM&FBovespa Index for corn (Campinas, SP) surpassed 50 BRL/60-kilo bag, closing at 49.40 BRL/bag on July 15, 1.8% up compared to that on June 30. Between July 8 and 10, the Index was higher than 50 BRL/bag, closing at 50.37 BRL/bag on the 8th, at 50.31 BRL/bag on the 9th and at 50.23 BRL/bag on the 10th of July.
CROPS – The corn harvesting was fast in central-western Brazil in the first fortnight of July, but not fast enough to press down quotes. In general, in Goiás, Mato Grosso and the Triângulo Mineiro region, the dry weather favored activities. Data from Imea indicate that, until July 3, 46.16% of the area in Mato Grosso had been harvested. The growers from this region were prioritizing the accomplishment of contracts, waiting for better opportunities to close new deals in the spot market.
In São Paulo and in Mato Grosso do Sul, the harvesting pace was slower, and deliveries were late, which underpinned prices. In these states and in Paraná, timely rains hampered activities. According to data from Seab/Deral, until July 6, the harvesting had reached 8% of the state area.
CONAB – In a report released in the second week of July, Conab (Brazil’s National Company for Food Supply) indicated that the Brazilian 2019-20 second crop corn may total 73.52 million tons, 0.5% higher than the previous. These estimates are lower than that from June, due to the adjustments in the outputs from São Paulo, Minas Gerais, Paraná and Mato Grosso. For the summer crop, Conab revised down, by 0.3% compared to that last season, the Brazilian corn output, to 25.57 million tons. Thus, total production is now forecast at 100.55 million tons, 0.52% higher than that in the previous season.
If these estimates are confirmed, corn supply in Brazil (initial inventories + production + imports) should total 111.64 million tons, 3.93% down compared to that in 2019. Conab estimates domestic consumption at 68.42 million tons, which would press down ending stocks to 8.72 million tons in January 2021, the lowest since the 2015-16 crop.
Exports estimates were kept at 34.5 million tons, 6.57 million tons down compared to that last season. So far, the exports pace has been slower than that in 2019, but shipments seem to be increasing this month. It is worth to mention that the European Union reduced to zero the imports tariffs on the Brazilian corn, which may boost shipments in the coming weeks.