- Posted by Mateus Ramos
With a new cold wave sweeping the Center and South regions of Brazil, expectations are growing of a sharp reduction in the supply of corn. The British price reporting agency AgriCensus points out that the climate in the country could cause a "historic crop loss, with new frosts hitting Brazilian corn areas".
According to them, frosts recorded in corn-producing states have raised new concerns about export volumes and contract violations: “The cold wave is forecast to reach its peak this Tuesday, with forecasts showing potential frosts in the states of Paraná, Mato Grosso do Sul, São Paulo and Minas Gerais”.
“It will be a historic crop loss. Production losses will be extremely large in all producing states, except Mato Grosso. Paraná and Mato Grosso do Sul will have no export capacity of any kind,” said Daniele Siqueira, from Agrural. The consultancy has lowered its estimates of off-season production in Brazil to 59.1 million tonnes in early July, 22 million tonnes below the initial crop potential, but new frosts could weigh even more and push estimates lower.
Victor Martins, from Hedgepoint Global Markets, told AgriCensus that “trading companies continue to repurchase corn contracts for the domestic market due to price differentials between the ports and the domestic market and quality issues. Exporters seem trapped, having to pay a quality premium to raise corn standards, comply with agreements and outstrip domestic market offers. There will be no corn left on the market in September and the country will need to import much more from Argentina”.
According to Siqueira, some producers are trying to accumulate better quality first-crop corn for further mixing, while others are looking to source corn from Mato Grosso or Paraguay and Argentina. “As Mato Grosso is the main exporter in Brazil, this makes the analysis even more difficult”, she concludes.
By: Leonardo Gottems | Agrolink