Corn prices soar in Argentina

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     Porto Alegre, October 27, 2020 – The international corn price scenario is experiencing a second semester with a certain atypical movement. The U.S. harvest of a crop of 374 million tons does not seem to affect the domestic scenario or the prices on the CBOT. Even without strong U.S. exports, corn tries to find support to stay above USD 4.00/bushel in the middle of the U.S. harvest. Argentina surprises this second semester with a sharp increase in its FOB prices, partly due to the restriction of domestic sales by growers, partly due to the announcements that Brazil will import a large volume of corn. International highs make any attempt to import corn into Brazil even more difficult.

     The harvest of the U.S. crop is well advanced this year. The dry climate in October has favored quick work across the Midwest. The harvest was 61% complete last week and must be over by the middle of the first half of November. Local domestic demand is a piece of data that has not registered additional movements in the ethanol segment or in the meat sector to the point of strengthening an additional scenario beyond that already foreseen.

     The beginning of a movement of retraction in unemployment and the reopening of the U.S. economy may suggest additional demand movements that cause price surges in the food segment. Even without a history of seasonality in times of pandemic, it seems to us that the reactivation of activities can generate this kind of demand and price movement.

     Agência SAFRAS Latam

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