Brazilian domestic market of corn suffers setback with appreciation of the real


The reduction of the climatic risk for the 2020 second crop leads us to focus our attention on some important indicators. With a crop of nearly 70 million tons being reaped for the next ninety days and internal consumption of 36 million tons for the semester, liquidity will be achieved through the flow of exports. At this point, selling decisions by producers and the flow of exports will define whether there will be greater pressure on domestic losses from now on or exports will be able to neutralize this movement of excess supply in the middle of the harvest.

Brazil’s 2020 second crop will reduce its risks of major production problems in view of the maturation stage reached in much of the country and already at the start of the harvest in Mato Grosso. Besides, the non-confirmation of frosts for the end of May and early June greatly reduced the possibility of more severe losses going forward. Undoubtedly, the rains of the last few days have quite helped to contain this production profile, we must only remember that losses in the pollination phase are not generally visible without a deeper observation of corn ears. Thus, we have an excellent production forecast for Mato Grosso and Goiás and a second crop with losses maintained for Paraná, Mato Grosso do Sul, São Paulo, and Paraguay, but eased with the rains of the last two weeks.

COLOCAR COLHEITA SECOND CROP From now on, therefore, what really matters are port prices and shipments. Seventy million tons of corn are reaching the market in the next ninety days and will need to be disposed of. A good flow of shipments in July will help at this peak of the harvest. Weak shipments may generate logistic pressures by advancing into the entrance of the second season. With little flow, we may have a slower harvest due to space in warehouses, since many new export trades only start to occur for shipments after September.