Corn prices remain high in the United States. On the other hand, quotes are accommodated in Brazil, with the market stalled in the face of concern about the climate. Crop conditions in Brazil will continue to draw market attention.
Follow below the facts that should deserve the attention of the corn market next week. The tips are from Safras Consultoria analyst Paulo Molinari.
- Corn prices remain at year-on-year highs after the November USDA report;
- With the stock cut, the market bias that China will be a major importer in the coming weeks holds prices;
- However, weekly exports are only normal, with no major changes from the normal average and do not yet reflect such optimism;
- There is a certain parallel concern with the wheat picture, mainly in Russia and Australia, considering that Argentina seems to confirm a crop failure already;
- Another picture is the relationship with soy. With soybeans close to US $ 12 / bushel, corn needs to remain competitive so as not to lose planted area in 2021;
- Climate in South America, imports from China and wheat prices are the basis for corn prices;
- Argentina presented localized rains during the week and is forecast for the week in the province of Buenos Aires;
- In the domestic market, the domestic market has a certain price accommodation;
- There is some regional offer for immediate delivery and consumers are more dependent on purchases for December and January;
- This mismatch helps the market to supply itself and prices remain practically stable;
- Now there is little influence of the exchange rate and port prices in the formation of prices due to the retraction of new export business;
- Imported corn still reaches Brazil at R $ 80 at the port, at least, plus domestic freight. Therefore, it cannot be said that the Brazilian supply situation is being solved with imports because there is no short, medium and long term schedule for Brazil in corn;
- Critical situation of the summer harvest in much of the South region. Midwest of SC and RS with losses of 60 to 80% irreversible. Even with rain going forward, the situation is one of significant losses;
- The harvest in late November is expected to present significant production losses;
- Brazil is unlikely to escape heavy imports in the first half to meet its domestic demand. Even if we have some downward demand adjustment, we will need imports;
- The point is that even with a lower exchange rate, importing is still quite expensive and needs to be thought out in advance due to logistics.
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