BRAZIL CORN WATCH: Prices ease further as harvest advances, import costs drop

Corn prices in some of the key markets of Brazil continued to ease over the last few days as the advance in the first-corn crop harvest and fall in import costs weighed on prices.

The depreciation of the dollar against the real has reduced the cost of imports, according to the national agricultural agency Conab.

Southern states in Brazil import corn, despite being one of the largest exporters of the cereal, as it is cheaper compared with transporting corn from the Midwest region of Brazil, where the bulk of the crop is grown.

According to one market participant, the fall of the dollar against the real has been making Brazilian domestic market prices more attractive for the animal feed sector. However, producers are supplied and waiting for the arrival of the second-corn crop to make new purchases, S&P Global Commodity Insights reported on April 4.

"In general, the downward movement was more intense at the beginning of the last week when sellers were looking to make cash and were more flexible with trading values," according to the Brazil-based Center for Advanced Studies on Applied Economics, or CEPEA.

Moreover, the growing conditions for the second-corn crop have been favorable in Brazil so far.

As of April 2, second-corn planting in Brazil is complete in 99.5% of the forecast area for the 2021-22 marketing year, while the harvesting of first-corn crop reached 51.6%. The survey was conducted over 92% of the total sown area.

Corn price received by producers in Brazil (Real/60 kg bag)

Weather outlook

The safrinha corn belt region in the center-west region of Brazil is likely to see low rainfall in the coming days, while the southern region may receive good rainfall, according to the latest weather forecasts.

In the center-west region, low rainfall, not exceeding 50 mm, is expected during April 4-11, Brazil's National Institute of Meteorology (INMET) said.

Significant rainfall volumes between 70 and 200 mm are forecast for the north-central Rio Grande do Sul and southern Santa Catarina during April 4-11 and rainfall may not exceed 50 mm in other parts of the region, INMET said.

"Dry weather in most of the safrinha corn belt allowed dryness to expand a bit, especially in northern growing areas. Rainfall should remain limited across northern portions of the safrinha corn belt over the next 10 days, increasing dryness and crop stress. Wet weather will continue to slow fieldwork in southern Brazil," space technology provider Maxar said in its daily weather report April 4.