Corn market scenario remains favorable to the producer

Even with the expectation that Brazil will harvest the largest harvest ever recorded in the historical series, of approximately 123,74 million tons, according to estimates by the National Supply Company (Conab), the high demand and uncertainties regarding the supply of the cereal in the world tend to guarantee profitable prices for farmers. The analysis is in the February edition of the AgroConab bulletin, published this Thursday (23/02) on the Company's website.

On the supply side, “the adverse climate condition has affected Rio Grande do Sul and has also caused impacts on Argentine crops. There is a projection of a 9,6% drop in corn production in the neighboring country, with a reduction of 5,0 million tons compared to the initial harvest figures. Furthermore, the uncertainty regarding the flow of cereals from Ukraine in Europe stands out, with the intensification of the conflict in Eastern Europe”, ponders the Agricultural Products Manager at Conab, Sergio Roberto Santos.

In the case of demand, the entry of China among the main buyers of Brazilian corn for the 2022/23 harvest is an important factor in the upward pressure on prices. Cereal shipments to the foreign market closed January at around 6,17 million tons, an increase of around 126% compared to the volume recorded in the same period of 2022, and an increase of 120,07% when the reference is average sold in the last 5 years. “With exports at an accelerated pace and with transit stocks being reduced, there is a slowdown in the downward movement in cereal prices on the domestic market, even in light of the harvest of the 1st harvest of the grain in Brazil, which usually reflects in negative seasonality of prices”, explains the Company manager.

If the scenario for corn is one of marketed values ​​pressured by market factors, in the case of cotton, the scenario appears more volatile. According to the AgroConab bulletin, both buyers and sellers are withdrawn and cautious. “Fiber sales continue at a slow pace and with occasional deals. In this way, producers measure supply, while buyers acquire only enough for their immediate needs”, the Company's market analyst, Adonis Boeckmann.