Corn prices have continued to ease over the last few days in Brazil as imports rose while exports also remained muted, data from the local government agencies showed.
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The corn price indicator tracked by Brazil-based Center for Advanced Studies on Applied Economics, known as CEPEA, fell to Real 85.69/60 kg ($257.33/mt) on Nov. 8 from 86.97/60 kg a week ago.
In the interior parts of the country, low liquidity prevails as buyers remain away from the spot market, indicating that they have stocks, CEPEA said in a note.
Corn price received by producers in Brazil (real/60 kg)
Nov. 2-6 2020
Oct. 25-29 2021
Nov. 1-5 2021
Year-on-year % change
Lucas do Rio Verde/Mato Grosso
Passo Fundo/Rio Grande do Sul
CBOT corn $/MT
CEPEA corn indicator
Increases in the availability of imported grain should maintain the downward trend in prices in the short term, according to the country's national agricultural agency Conab in its weekly report on Nov. 8.
It should be noted that corn imports as of October were over 133% higher than the same period in 2020.
Brazil has already imported 2.14 million mt of corn during January-October, compared with 1.37 million mt in the whole of 2020, customs data showed.
Corn imports into Brazil were at 122,155 mt in the first three business days of November, compared with 209,348 mt imported in the whole of November 2020, customs data showed.
Although Brazil is among the world's largest exporters of corn, the southern states often import from Paraguay and Argentina as it is cheaper than transporting corn from the Midwest region of Brazil where the bulk of the corn crop is grown.
The animal protein industry, a major consumer of corn feed, is concentrated in southern Brazil.
Meanwhile, Brazil's corn exports in the first three business days of November totaled 447,195 mt at a daily rate of 149,065 mt, against 236,631 mt/day in the whole of November 2020.
"Buyers are aware of the prospects for a good summer harvest and are comfortable with stock levels amid sluggish exports. On the seller side, some producers who need to free up space in warehouses end up being more flexible in terms of pricing," CEPEA said in the note.
Brazil's corn output in 2020-21 dropped sharply due to drought and frost, which has reduced the quantity available for exports and increased imports.
The improving planting conditions in Brazil due to timely arrival of rains have also made buyers hopeful about higher corn production in 2021-22, which is also weighing down on prices.
Brazil's 2021-22 corn crop will be marketed during February 2022-January 2023.
The planting of first corn in the key states of Brazil, which accounts for 92% of the forecast area, reached 54.4% of the estimated area for 2021-22 as of Nov. 6, compared with 53.1% a year ago, Conab's crop progress report showed.
"Weather conditions have ensured a good planting rate and adequate conditions for crop development throughout the region," Brazil-based agriculture consultancy AgRural said in a report Nov. 8.
However, soil moisture has declined across southern Brazil, with dryness stressing crops in Sao Paulo, northern Parana, and Rio Grande do Sul.
Moreover, dryness is likely to linger in Sao Paulo, Parana, and Rio Grande do Sul. Rainfall will remain limited in southern Brazil during the 6-10 day period, Maxar said in its daily weather report on Nov. 8.
Meanwhile, 2021-22 soybean planting reached 67.3% of the estimated area in the oilseeds producing states of Brazil, which account for 97% of the cultivated area, as of Nov.6 compared with 55.1% around the same period in 2020, Conab data showed.
The timely planting of soybean is crucial since the second corn crop is planted after soybean harvesting. Any delay in the oilseed crop planting could force farmers to plant corn crops outside of the ideal planting window, which could hurt corn yields.
The first corn crop in Brazil is planted during September-December and harvested in February-May, while the second crop is planted in February-March and harvested in June-July.
The first corn crop accounted for 25% of Brazil's total corn production in 2019-20.