- Posted by Marina
The price of corn in Santa Catarina reached R $ 70.50 in two different markets on the 2nd of October. “When, at the end of August, we said that we would not be surprised if the price reached R $ 65.00 at the end of September and R $ 70.00 / bag in October and eventually R $ 75.00 in November, we did not imagine that our forecasting would materialize sooner than we were predicting ”, points out TF Agroecômica.
“And the question that remains is: does corn have a chance of rising more? We continue to believe so, ”says TF's team of market analysts, who highlight the following factors:
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a) Shortage of offers reached practically all consumer states, with offers restricted to the states of the Brazilian Midwest (MS / MT and GO, mainly) that supply RS, SC and SP, but at high prices, since prices at the origins are also rising, to which must be added the freight;
b) The more you buy from the states of the Midwest (inelastic demand), the lower the availability (elastic supply) and the more prices rise. Now, corn prices in the Dourados region are already, according to the Cepea average, around R $ 55.00. If the average freight of R $ 11.00 / bag is added, matogrossense corn would arrive in Rio Grande do Sul around R $ 66.00, at the beginning of October. As we show below (see MS) this week lots were traded not only for the domestic market, but also for export, decreasing availability and increasing the possibility of high local prices.
c) As we already take for granted that the price will reach R $ 70.00 / bag in RS and SC in the first half of October, it is likely that it may gradually rise to R $ 73.00 until the end of the month and we see great chance that it will reach R $ 75.00 / bag in the month of November, when there will still be no availability of the summer harvest and the previous winter season will be with its availability very reduced.
d) Finally, with farmers heavily capitalized by the excellent profits from soy, corn and wheat this year, they do not feel pressured to sell and can expect better prices.