Purchasers are away from trades; prices move down

Cepea, April 17, 2024 – Purchasers of corn were away from closing deals in the spot market in Brazil in the beginning of April, since they claimed to have stocks for the short-term. This scenario kept prices in a downward trend in many regions surveyed by Cepea. The progress of the summer crop in Brazil, estimates indicating a high global production and price drops in the international market reinforced the decrease in Brazil.

From March 28 to April 15, the ESALQ/BM&FBovespa Index (Campinas, SP) dropped 3.37%, closing at BRL 59.70 per 60-kilo bag on April 15. The Index had not closed below BRL 60/bag since November last year.

ESTIMATES – The USDA reduced ending stocks of corn in the United States in the 2023/24 season, now forecast at 53.9 million tons, against 55.17 million tons indicated in March. Global ending stocks may reduce to 318.28 million tons, against the 319.62 million tons projected in the March report.

As for Brazil, the USDA kept the production estimate at 124 million tons and export may continue at 52 million tons. The world production is likely to hit 1.22 billion tons, against 1.23 billion forecast in March. The consumption continues at 1.21 billion tons.

Conab, in turn, reduced the projection for the production in Brazil, due to concerns with the second crop. Now, it is likely to total 110.96 million tons, 2% less than the March report and 16% below what was verified in the 2022/23 season. The summer crop may amount 23.35 million tons, while the third crop can total 1.99 million tons. As for the second corn crop, the area will be 8% lower and the productivity is expected to reduce 8.9% in relation to the season before. As a result, production is forecast to hit 85.6 million tons, 16.4% less compared to the previous crop.

CROPS – Data from Conab indicate that, up to April 7, 99.5% of the second crop area in Brazil had been planted. As for the summer crop, the harvest had totaled 51% of the area until April 7, upping 4.6 percentage points compared to April 1 – data from Conab.

(Cepea-Brazil)