The closing of May was marked by a certain tension in relation to the climate, but also by pressure on prices due to the strong appreciation of the real. With no frosts that might harm the crops, the market focused on port prices. The appreciation of the real brought a sharp decline to prices at ports, from the levels of BRL 49/50 to BRL 45/46. The reflection started to reach prices in the interior of the states already in the pre-harvest of the second crop, mainly in Mato Grosso. As of now, the market enters the second crop standard and must adjust to port levels in view of the need to sell at least 30 million tons this year, a level that we may still be quite distant from.
Last week had weather forecasts of widespread frosts for second-crop regions. The frosts occurred but were far from reaching the corn fields to the point of bringing new production losses. There is still a good portion susceptible to the effects of strong frosts, at least with regard to the specific weight of grain and quality. June is forecast to have two new cold fronts that may bring this kind of risk to a part of later crops in Paraná, Mato Grosso do Sul, and São Paulo.
However, the market seems to have reflected that the risks have decreased and that production will come out under the conditions that are already known today, with some crop losses in these states due to drought, but without new losses induced by frost. Thus, selling intentions accelerated in all regions of the country last week, for both physical and second-crop corn. This climatic relief came together with strong depreciation of the dollar, which tested levels of BRL 5.30 over the week.