Cepea, September 17th, 2021 – The harvesting of the second crop of corn advanced in Brazil in the first fortnight of September, however, liquidity continued low in the national spot market. Besides the holidays in Brazil (Independence Day of Brazil, Sept. 7th) and in the United States (Labor Day, Sept. 6th), the slower trading pace was also linked to the disinterest of purchasers, who expect new devaluations in the coming weeks.
In that scenario, corn prices faded in the Brazilian market in the first half of the month, however, devaluations were limited by concerns about supply. Farmers reported significant decreases in productivity, which was confirmed by official data.
Between August 31 and September 15, the ESALQ/BM&FBovespa Index for corn (Campinas, SP) dropped by 1.4%, closing at 93.43 BRL (17.82 USD)/60-kilo bag on September 15. In Campinas, consumers reported to have inventories, majorly for the short term, which has been putting pressure on values since mid-August.
PORTS – Another factor that influenced price drops in Brazil in the first fortnight of September is the lower interest of purchasers at Brazilian ports. Cepea surveys show that at the ports of Paranaguá (PR) and Santos (SP), corn prices were up to 20 Reais/bag lower than that in Campinas in that period.
So far, the volume exported in 2021 has been lower than that last year. This scenario led Conab (Brazil’s National Company for Food Supply) to revise down exports estimates for the current season (Feb/21 – Jan/22), to 22 million tons, but agents believe shipments may be even lower than Conab’s estimates. This volume is 1.5 million tons lower than that reported in August and nearly 13 million (40%) below that in the 2019/20 season.
ESTIMATES – Data released by Conab on September 9 estimated the output from the first crop of corn (2020/21 season) at 24.74 million tons, 0.6% down from that previously estimated, reflecting weather issues in southern Brazil in early 2021.
For the second crop, Conab revised down production estimates for central-western BR and Paraná State, however, this decrease was partly offset by increases (or stability) in other Brazilian states. With the national productivity estimated at 3,982 kilograms/hectare, the second crop is now forecast at 59.47 million tons, 21% down from that in the 2019/20 season. The report highlighted that the water deficit and frosts lowered the national output.
For the third crop, the area allocated to corn is forecast to be 9.2% larger than that in the previous season, with an output of 1.53 million tons in 2020/21, still 16.8% lower than that last year.
Considering the three crops altogether, Brazilian corn supply is estimated at 85.7 million tons. Domestic consumption is forecast at 70.9 million tons, the highest, according to Conab, due to the good performance of the Brazilian livestock sector. Exports are predicted at 22 million tons, and imports, at 2.3 million tons. In this case, ending stocks by Jan/22 would total 5.8 million tons, a steep 45% down from that in the previous season.
CROPS – It rained in some areas in southern Brazil in the first half of September, which heartened farmers. In general, the harvesting of the second crop and sowing of the summer crop are advancing. According to Seab/Deral, 82% of the second crop had been harvested until late August, and 3% of the area in 2021/22 had been sown.
In central-western Brazil, Conab reported that 97% of the area in Goiás had been harvested until September 4. In Mato Grosso do Sul, Famasul reported that 86.8% of the area had been harvested until Sept. 3. According to Famasul, although it rained in MS, the volume was still low.
For Rio Grande do Sul, according to Emater/RS, sowing activities stepped up as moisture increased, and both the output and the area my grow by 40% and 7%, respectively, to 6.11 million tons and 834 thousand hectares.