BRAZIL CORN WATCH: Prices likely to stay high as local, export demand increases

The corn price in Brazil is likely to stay high and rise further in the near term due to the increase in both international prices and export demand, according to national agricultural agency Conab.

"The domestic corn market continued its upward trend following the movement of prices in the international market. Demand for future exports is already putting pressure on domestic prices in the spot market for the second crop," Conab said.

The FOB corn premium markets were quiet amid a lack of demand both in Argentina and Brazil, and no advance was reported for corn sales by producers in agricultural regions. There was demand, but sellers have stayed away in anticipation of new price highs, S&P Global Commodity Insights reported March 14.

Brazilian feed consumers are looking for new deals, but sellers have either withdrawn from the market or the quoted corn prices were deemed high by buyers, the Brazil-based Center for Advanced Studies on Applied Economics, or CEPEA, said.

Producers were also wary of the increasing costs of fuel and freight, CEPEA added.

So far, expectations of good second-corn crop production was preventing a more vigorous increase in prices, Conab said.

Planting of the second-corn crop in key states accounting for 92% of the forecast area for the 2021-22 marketing year had reached 87.4% as of March 12, ahead of the 71.5% recorded around the same time last year, Conab said.

Second-corn planting in Brazil continued to progress at a good pace, but concerns remain over the lack of adequate rainfall in some of the key producing states.

In southern Mato Grosso do Sul, irregular rainfall has hindered planting in some regions, Conab said.

Crops are developing well throughout the Center-South region, but soil moisture was low in Parana, Mato Grosso do Sul and Sao Paulo and more rain was needed in the short term, Brazil-based agricultural consultancy AgRural said in a report.

Rains are expected in the coming days in some of the regions that lack adequate soil moisture.

In the country's southern region, precipitation of 60-150 mm was forecast in western Santa Catarina and southern Parana over March 14-30, Brazil's National Institute of Meteorology said.

Corn price received by producers in Brazil:

(Unit: Real/60 kg bag)