BRAZIL CORN WATCH: Exports remain slow amid low supply, weak demand

Corn exports from Brazil in the first five business days of August stood at 718,244 mt at a daily rate of 143,649 mt, compared with 6.24 million mt at a daily rate of 297,323 mt for the whole of August 2020, showed customs data released on Aug. 9. The exports continued to lag behind the previous year's pace on low supply and weak export demand, traders said.

The country faces a shortage in domestic supply as drought and frost in 2021 brought down the crop yield and output of 2020-21 corn crop and exports will be sharply down from the previous season, market sources said.

In the corn FOB Santos market, participants were busy executing the previous contracts than have fresh trades. "The market seems boring and there is no final demand for Brazil," an FOB Santos market participant said. "Players are trying to organize their books, covering shorts and getting rid of longs that will not have demand."

Brazil's 2020-21 corn crop is marketed during February 2021-January 2022. In July, Brazil's corn exports were nearly 2 million mt, down 50% year on year, according to the customs data.

In its August survey, Brazil's national agricultural agency CONAB cut the corn production forecast to 86.65 million mt from 93.38 million mt projected in July.

With the production estimate revised, corn export from Brazil, the second-largest exporter in the world, was lowered to 23.5 million mt for 2020-2021 from 29.5 million mt projected in July and also below 35 million mt in 2019-2020.

Meanwhile, domestic corn market prices were mixed, but remained high, as local buyers were not active in the market.

"Corn prices started to show different movements among the cities followed by CEPEA, with falls predominating. In the regions where corn prices fell, the pressure came mainly from the retraction of buyers, who are paying attention to the advance of the harvest and the slower pace of exports," said Brazil-based Center for Advanced Studies on Applied Economics (CEPEA).

The second corn crop harvest across nine states, accounting for nearly 92% of the area, was 61.5% complete as of Aug. 7, compared with 71.1% around the same time in 2020, CONAB said in its latest weekly report.

Second corn harvesting in the major producing states of Brazil

Source: CONAB