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Devalued real and demanding protein industry should keep corn high in Brazil, says Itaú BBA

Posted by Marina

The consultancy Itaú BBA released its Agro Monthly report analyzing the current scenario and pointing out perspectives for several Brazilian agricultural products such as soy, corn, cotton, sugar, coffee, orange and animal proteins.

With regard to corn, the consultants pointed out that the Brazilian producer continues with restrictions in making the product available on the market and the advance of the harvest in the producing regions should influence the prices to oscillate close to the levels of export parity.

"Export parity tends to remain at high levels in view of the devalued exchange rate and the demanding domestic market, in the wake of the positive moment in the animal protein industry, which helps to increase premiums at ports", states the report.

Looking at the next 2020/21 crop, Itaú BBA points out that the time for quotations is also good and that producers take the opportunity to intensify the early sale of this next crop. In Mato Grosso, for example, 40.9% of this next production is already negotiated, according to Imea (Instituto Mato-Grossense de Economia Agropecuária).

For the current crop, the analysis is for prices that rose again in July, even with the harvest of the second crop advancing and the devaluation of the dollar against the real. "The reason for this comes from the good capitalization of the producer after the good results obtained with soybeans and the high volume of early commercialization, which also removes the pressure for part of the production, which has not yet been negotiated, to be made available to the market".

Finally, the report also highlights figures for the Brazilian corn balance. According to a survey by the consultancy, the country started the 2019/20 cycle with 10 million tons of corn in stock, is expected to produce 101 million and import another 1 million, totaling a total supply of 111 million tons. On the consumption side, 35 million tons are estimated for export and another 68 million for domestic use, leaving a final stock of 8 million tons, 2 less than the beginning of the harvest.

Source: Notícias Agrícolas