Image: Pixabay
With a new wave of cold sweeping the Central and Southern regions of Brazil, expectations are growing of a strong reduction in the supply of corn. The British price reporting agency AgriCensus points out that the climate in the country could cause a “historic harvest loss, with new frosts hitting Brazilian corn areas”
{module Form RD}
According to them, the frosts recorded in corn-producing states have raised new concerns about export volumes and contract violations: “The cold wave is expected to reach its peak this Tuesday, with forecasts showing potential frosts in states of Paraná, Mato Grosso do Sul, São Paulo and Minas Gerais”.
“It will be a historic crop loss. Production losses will be extremely large in all producing states, except Mato Grosso. Paraná and Mato Grosso do Sul will not have export capacity of any kind”, said Daniele Siqueira, from Agrural. The consultancy reduced its estimates of Brazil's off-season production to 59.1 million tons at the beginning of July, 22 million tons below the initial harvest potential, but new frosts could weigh even more and put downward pressure on estimates.
Victor Martins, from Hedgepoint Global Markets, told AgriCensus that “trading companies continue to repurchase corn contracts for the domestic market due to price differentials between ports and the domestic market and quality issues. Exporters seem trapped, having to pay a quality premium to raise corn standards, comply with agreements and surpass domestic market offers. There will be no corn left on the market in September and the country will need to import a lot more from Argentina.”
According to Siqueira, some producers are trying to accumulate better quality first-crop corn to mix later, while others are trying to obtain corn from Mato Grosso or Paraguay and Argentina. “As Mato Grosso is Brazil’s main exporter, this makes the analysis even more difficult,” she concludes.
By: Leonardo Gottems | agrolink
