Prices of corn in Brazil remain high and dependent on selling interest


     Porto Alegre, October 27, 2020 – The market tried several indicators to promote selling interest amid growers, considering that it is clear that their stocks have not been sold. The announcements of withdrawal of the extra-Mercosur tax, some announcements that groups would be willing to import corn, some rumors and information that imports of U.S. product were already underway, without any fundamental, and, finally, aggressive action of volatility on the BM&F to try to drive growers to physical sales were movements seen in the last few days to prevent corn from keeping surging. It is worth remembering that Argentine corn is on the rise only because of the Brazilian media attitude of announcing to the world that it will import, and this is reflected in domestic prices in Brazil.

     The Brazilian corn market continues to grow exponentially. As we have already reported, the supporting factors are aligned on the following points:

      – Growers are capitalized and adopt a slower trading pace;

      – Very firm internal demand;

      – Exports below 2019, but actively participating in domestic trading;

     – Devalued exchange rate;

     – Discreet replenishment of stocks by an important portion of internal consumers until July 2021;

     – Expensive and difficult imports;

     – Discreet and insufficient summer crop to meet all Brazilian demand in the first half of 2021;

     – Summer crop with initial climatic problems in the South and potential delay in the planting of the 2021 second crop;

     – Government without buffer stocks.

     Agência SAFRAS Latam

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