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Cepea, January 15th, 2024 – Unfavorable weather conditions for the 2023/24 summer crop may delay sowing activities of the second season, which currently accounts for 3/4 of the Brazilian supply. As for prices, levels at this early 2024 are lower than one year ago, which reduces margins and, along with El Niño impacts on productivity, reduces the interest of farmers to grow corn. At B3, futures indicate higher levels in the second semester.
While the production is expected to decrease, the domestic consumption may move up, especially from animal feeding and corn ethanol sectors. A possible balance between supply and demand may come from a decrease in exports – international sales may be limited by the lower domestic surplus.
Conab indicates a 7.5% decrease of the 2023/24 summer crop supply compared to the previous, estimated at 25.31 million tons, and the area may move down 9.2%, the lowest of the Conab series, which has started in the 1976/77 crop. Up to December 30, 2023, sowing activities in Brazil had reached 80.4% of the area, against 87.3% in the same period last year. The harvest, in turn, had totaled 0.9%, against 0.2%.
Adding the 2023/24 summer crop production to ending stocks (projected by Conab at 6.348 million tons by late January/24), the supply is 31.6 million tons in the first semester. This volume is equivalent to 37% of the domestic consumption in the year, which is already concerning players.
Therefore, agents are focused on the second crop, and Conab already indicates decreases for area, productivity and production. In December, the 2023/24 second crop area was estimated at 16.41 million hectares in Brazil, 4.5% down compared to 2022/23. Productivity and production are projected to be 6.7% and 10.9% smaller than in the season before, at 5,557 tons per hectare and 91.23 million tons, respectively. As for the third crop, production may amount 1.98 million tons, 10% lower than in 2022/23.
Considering initial stocks, by February/24, of 6.35 million tons, the total production of 118.52 million tons and imports of 2.1 million tons, the domestic availability will be 126.97 million tons in the 2023/24 season. Subtracting the domestic consumption (84.46 million tons), the domestic surplus is 42.5 million tons, the lowest since 2020/21, when it was 34.33 million tons, according to Conab.
Conab estimates exports at 38 million tons between February/24 and January/25. If this scenario is confirmed, ending stocks would total 4.5 million tons by January/25, lower than in the crop before and smaller compared to estimates released previously.
(Cepea-Brazil)
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Fonte: Cepea