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The prospects for an increase in corn continue in the long term in the international market, which ends up influencing the cereal in Brazil, according to information from TF Agroeconomic. “The United States, Ukraine and Brazil were mainly responsible for the global increase in corn production in 2020/21, which grew by around 6 million tons”, he comments.
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“However, American and European country exports to China alone grew by 23 million tons in the season, according to Refinitiv. In this context, it appears that the increase in production has not fully covered the robust Chinese demand, which has contributed strongly to the rise in prices observed in the period”, he adds.
Another factor for the increase is that soil humidity in Brazil is below the historical average. “As a result, we will not have the same volume for export, as Conab pointed out this week, and the domestic market will have priority, because the dollar is falling. Even so, prices are expected to remain high until the end of the 2021 season”, he indicates.
On the downtown side, the beginning of the safrinha harvest stands out. “When it gets closer to the end of the season, prices will tend to recover, because international demand for meat remains high and should keep prices, both on the domestic and international markets, higher than those of the previous harvest. It will be the third year of high profitability for the farmer”, he informs.
Finally, the fall of the dollar also has an influence. “The economist at the English consultancy Capital Economics, Jonathan Petersen believes that, at the end of the year, it should be around R$ 5.50 and the analyst at the Canadian bank CBIC, Luis Hurtado predicts something around R$ 5.30, compared to the fiscal risk that still persists and the start of disputes over elections in 2022, which could disrupt the economy”, he concludes.
By: Leonardo Gottems | agrolink
