Last week, even with the pace of corn exports increasing, the numbers were still below those recorded last year. In Paraná, one of the main producers, 92% of the area destined for the 2024 second crop have already been harvested. However, with falling prices in Chicago and at BM&F, which directly affect the physical market, the intention to sell corn slowed down, increasing the commodity's losses, according to an analysis by Grão Direto.
Grão Direto points to stabilization in the price of beef cattle, indicating a possible end to the low phase of the livestock cycle. This recovery may improve the margins of livestock farmers, making them more competitive when purchasing corn. In addition, with the recovery in the price of beef cattle, feed mills, which have been adopting a cautious stance in purchasing, may start to build up stocks for the end of the year, which should increase demand for the grain.
Expectations of falling prices amid negative demand
According to the analysis, however, corn sales in Brazil are facing challenges. Producers are holding onto the grain in the hope of better prices, which has supported prices in the physical market. International demand for Brazilian corn is considerably weaker compared to last year, and domestic buyers are also showing no urgency to purchase the product. The arrival of the North American harvest and the price drops in Chicago suggest a scenario of devaluation both in the foreign market and in Brazil.
The country relies heavily on foreign exchange earnings from grain exports, while the government is working to shore up the central bank’s dwindling reserves. However, the weather is not expected to be severe enough to significantly harm production. The USDA’s WASDE report is expected to indicate a yield of 182.5 bushels per acre, slightly higher than the 181 bushels per acre initially forecast. This scenario still leaves room for corn prices on the CBOT to fall, according to Grão Direto.
Based on the aforementioned factors, the corn market is likely to face another negative week, although not as sharp as the declines seen last week, according to the analysis data.
Source: Seane Lennon | agrolink
