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Brazilian off-season and international market for corn

Posted by Rafael Moro

Image: Pixabay

Perspectives for high corn prices continue in the long term in the international market, which ends up guiding the cereal in Brazil, according to information supplied by TF Agroeconômica. “The United States, Ukraine and Brazil were the main responsible for the global increase in the 2020/21 corn production, which grew about 6 million tons”, he comments.

“However, American and European exports, just to China, grew 23 million tons in the season, according to Refinitiv. In this context, it appears that the increase in production has not fully covered the robust Chinese demand, which has strongly contributed to the rise in prices observed in the period”, he adds.

Another high factor is the soil moisture in Brazil is below the historical average. “With this, we will not have the same volume for exports, as Conab pointed out this week, and the domestic market will have priority, because the dollar is falling. Even so, prices are expected to remain high until the end of the 2021 season,” she says.

On the downtown side, the start of the off-season harvest stands out. “When it comes to the end of the season, the trend is for prices to recover, because the international demand for meat is still high and should mantain their prices higher than those of the previous harvest, both in the domestic and international markets. It will be the third year of high profitability for the farmer”, she informs.

Finally, the fall of the dollar also influences. “The economist at the British consultancy Capital Economics, Jonathan Petersen believes that, at the end of the year, it should be around R$ 5.50 and the analyst at Canadian bank CBIC, Luis Hurtado, forecasts something around R$ 5.30 , given the fiscal risk that still persists and the beginning of disputes for elections in 2022, which could disrupt the economy”, he concludes.

By: Leonardo Gottems | Agrolink

This text was automatically translated from Portuguese.