Porto Alegre, October 19, 2020 – The impact of the rain delay in October already reflects the new level of corn prices in the Brazilian domestic market. During the week, the market prices ranged from BRL 60 to 70 a bag in Brazil’s Center-South and BRL 50 to 60 in the Northeast. Even with the bias towards a La Nina in this second semester, pointed by Safras & Mercado following NOAA’s information since the first semester, the Brazilian consumer sector continued to be reactive to market movements rather than proactive.
This positioning of internal consumers fuels the upward movement, when the exchange rate, the international market, and the weather come together to consolidate a surprising price picture in October. Difficulties with corn supply were expected for the first half of 2021, but this combination of factors is bringing them forward. High prices on the CBOT in the middle of the U.S. harvest reveal the concern over wheat worldwide as well as capital flow to the commodities market. Commodity prices begin to move from the lows generated by the pandemic to find room for highs in the financial flow and fundamental variables of each market. What is quite clear is that the upward movements of corn on the CBOT and in Brazil have very little to do with China.
Agência SAFRAS Latam
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