Cepea, February 18, 2020 – The harvesting of the summer crop corn is advancing in Brazil, and purchasers are interested in buying new batches. However, many sellers have been away from the market, helping to push up corn prices in most of the regions surveyed by Cepea. Besides, data from Conab (National Company for Food Supply) have increased expectations for lower inventories, also influencing the upward trend of quotes in the Brazilian market.
Between January 31 and February 14, the ESALQ/BM&FBovespa Index (Campinas, SP), rose 1.9%, closing at 52.13 BRL (12.12 USD) per 60-kilo bag on February 14. As soybean deliveries are at a fast pace, freight for corn transportation is also influencing the Brazilian corn market.
Data released by Conab on February 11 pointed to a slight increase of 3.4% in the area allocated to the summer crop (2019/20) in Brazil and an average productivity at 6.14 tons per hectare, 1.8% down. Thus, the Brazilian corn output is forecast at 26.06 million tons, a slight 1.6% up compared to that in the previous crop.
For the second crop corn, Conab estimates the national area to be 2.7% larger, and the average productivity to be 2.5% lower, at 5.5 tons per hectare. Thus, the Brazilian corn production is now estimated at 73.3 million tons, slightly higher than that in the previous season. Thus, the area allocated to corn in Mato Grosso should be 9% larger, offsetting the lower productivity due to the delay in soybean sowing.
Conab estimates 70.5 million tons of corn to be consumed in Brazil, 8% more than that in the previous crop. Higher consumption estimates are linked to the livestock sector and new refineries that produce ethanol from corn in central-western Brazil.
So far, exports in the 2019/20 crop are estimated at 34 million tons. Thus, ending stocks (Jan/20) are forecast at 8.4 million tons, 38% lower than the average in the last five years.
USDA – In a report released in the first fortnight of February, the USDA estimated the Brazilian and the Argentinean outputs to total 101 million tons and 50 million tons, respectively, stable compared to that in the 2018/19 crop. In the United States, production is forecast at 347.7 million tons, 4.5% down compared to the past one.
Globally, corn production is estimated at 1.11 billion tons, 1% lower than the previous. World consumption is forecast at 1.35 billion tons, and ending stocks, at 296.8 million tons, 7.4% down compared to that in the previous season.
In Brazil, the harvesting of the first crop corn and sowing of the second crop are advancing. In Paraná, Seab/Deral estimates 13% of the state area may have been harvested until February 10. In São Paulo, Cepea collaborators claim that the rains along the fortnight hampered work in the field.
In Rio Grande do Sul, the harvesting has reached 43% of the area, according to Emater. As rains were irregular during plants development, yield varies according to the region.
Sowing of the second crop is advancing at a fast pace. According to Imea, until February 7, 38.9% of the area had been sown. In Paraná, activities have reached 14% of the area.
EXPORTS – In January, Brazil exported 2.29 million tons of corn, 45% less than that in the same period last year and the lowest volume since July/19. However, between February/19 and January/20 (2018/19 season), shipments totaled 42.4 million tons, a record and 78% higher than the volume exported in the previous season, according to Secex.