Porto Alegre, November 23, 2020 – The picture of corn supply in the first half of 2021 was seen as tight and dependent on some attitudes from the private sector to contain a more critical situation. Some demand restraint, stocks replenishing in advance, some imports, and a good trading strategy were needed. Now, losses in the two southern states of Brazil accelerate this picture of supply problems. What could have been possibly solved with some consumption adjustment and some imports in the semester will now only be solved with imports.
The 2020/21 crop was indicating some climatic tension due to the arrival of La Nina. Now, La Nina has two consecutive quarters with temperatures in the Pacific below -0.5º C and will reach the third quarter confirming the presence of the phenomenon for this season, according to NOAA. The question of intensity is what may be discussed from now on, as well as effects on the climate in South America.
Until August, discussions were on the size of the planting of the summer corn crop, compared to record soybean prices, as well as the future effect of La Nina on crops. The expectation was that the summer would be drier, as is common with this phenomenon in the southern region of Brazil and Argentina. For this reason, many growers in the South region brought forward their corn planting as much as possible to try to escape from the critical climatic phase at the height of the summer. August was a good rainy month for September, and there was still a frost hitting new crops in Rio Grande do Sul.
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