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The big question on every Brazilian corn producer's mind right now is: Why are corn prices falling? Do you have a chance to go back up? The team of analysts at Consultoria TF Agroeconomia 'looked into' the problem and reached conclusions that can help in decision-making.
“In our opinion, corn prices are falling for two reasons: First, because buyers are (always) supplied for at least a month, and in some cases even two. The second reason is that the 'Safrinha' (second corn harvest) harvest begins in just two months, which looks promising”, explain the experts.
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As a result, TF Agroeconomic Consultancy details, cereal buyers “can stay out of the market, which is the most common attitude of those who do not want to put pressure on” acquisitions, lowering prices. This way, they force prices down and are able to make the (few) purchases they need until they reach the beginning of the off-season, when prices will be between two and five reais/bag lower than current prices”. According to the team of analysts, the only factor that could turn this game around would be the strong entry of exports, given the lack of offers from Ukraine – the world's fourth largest exporter, but which is at war and has its ports attacked. “International prices are moving sideways, on the rise, but the Dollar in Brazil is falling (it was R$ 5.10 at the start of the war, today it closed at R$ 4.66, a drop of 8.63%). This does not help export demand at the moment. It is, however, a possibility”, concludes the TF.Source: AGROLINK
