Supply and demand picture shows few changes to corn

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          The corrections in the numbers of the Brazilian crop barley change the profile of Brazilian supply and demand. A crop above 105 million tons ensures an internal supply in the second half without problems and maintains carryover stocks for 2021. This becomes important because with the current soybean prices for next year it will be difficult to motivate producers to plant corn next summer, especially with the projected rise in production costs.

A production of 105.7 million tons allows carryover stocks of nearly 10.4 million tons for Brazil. The picture for this first semester is tight, as expected, but there must be some slack for the second semester. What the picture makes clear now is that Brazil will need to export 30 million tons this year. The strong devaluation of the real against the dollar, at this moment, is the only point that sustains high prices at Brazilian ports. The port has indicated BRL 46/48 for the second crop, for August/September, and even the price of BRL 49 was registered last week in Santos.

This is because fact that the US crop may be record-breaking in 2020, with an area of ​​94.2 million acres, if confirmed by the USDA on March 31st. Argentina and Ukraine with record crops announced. A climate problem in the United States is always a possibility. Current prices indicated at ports, just supported by the exchange rate, seems an opportunity for Brazil to boost sales for the 2020 second crop. The volume of export commitments so far involves no more than 12 million tons, and we need to more sales to reach the year’s goal. Brazil will hardly get numbers similar to those of 2019 without a crop problem in the United States.