Market of corn keeps rising due to low sale commitments by growers

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     Porto Alegre, October 27, 2020 – Some price movements in the second half of 2020 have been completely atypical for the period. Price highs on the Chicago Board of Trade (CBOT) in the middle of the harvest of the second largest corn crop in the U.S. history and record-breaking prices in Brazil even with a great harvest of the 2020 summer crop. We cannot say that exports are the motivator of this price movement. In the United States, sales have followed the normal average, with no surprises despite good shipments made by China last week. In Brazil, exports are also striving to reach the goal of 34 million tons this year, well below the 41 million tons of 2019.

     Corn prices continue to rise abroad due to the movement of firmness in the wheat market, and in Brazil for the variables already pointed out as capitalization by growers, climate, attempt to find reasons for highs in a potential future shortage and very high import costs. The long way for the Brazilian market to supply itself until July 2021 is what supports this internal movement. Good export demand for the 2021 second crop is an additional aspect, but already normal in the national market. Basically, the Brazilian domestic market needs to see the summer crop with less climate risk as well as the 2021 second crop picture to reset some profile of stabilization.

     Agência SAFRAS Latam

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