Corn prices to remain high on Brazil’s export record

Brazil’s corn exports set a new record in December compared to the same month in previous years. In total, 6.41 million tonnes of the commodity were exported, the best performance on record, exceeding even December 2015, with exports of 6.27 million tonnes, according to the country’s National Supply Company (Conab).

According to the state-owned company, foreign sales are still hot at the start of the year. According to data from the Foreign Trade Secretariat (Secex), shipments reached 4.2 million tonnes in the first 15 working days of January. The volume of shipments, while still in its early stages, already exceeds the total for January 2022 by 54%.

“The high volume exported in December includes 1.1 million tonnes destined for China, which improves the prospects for marketing the cereal to the Asian continent this year,” highlights, in a statement, the Superintendent of Market Studies and Conab Offer Management, Allan Silveira.

See below a graph with the volume of corn exported (hs 1005) from January 2019 to November 2022, according to Datamar’s DataLiner market intelligence tool.

Brazilian corn exports | January 2019 – November 2022 | WTMT

Source: DataLiner (click here to request a demo)

High prices

According to the Conab report, heightened sales in 2022 and at the beginning of this year continue to keep cereal prices high in the domestic market due to lower carry-over stocks. In addition, the cut in production for the MY 2022/2023, both in the first Brazilian crop and the United States, should contribute to scenarios of rising prices, especially in the first half.

In the case of soybeans, Conab points to an upward trend in domestic market prices throughout 2023, influenced by the international oilseed market. The increase in global prices is explained mainly by the drought registered in Argentina. The expectation is that production in 2022/23 should range from 35.5 to 41 million tonnes, according to the Grain Exchange.

“With the crop failure in Argentina, Brazil should continue with strong exports of soymeal and soy oil in 2023. Furthermore, the possibility of increasing the percentage of biodiesel to diesel from 10% to 15% should keep crushing rates high. Therefore, the estimate for Brazilian soybean exports should also be high, supporting national prices,” emphasized the company’s superintendent.

The trend for wheat is the opposite, with a drop in domestic prices. The country’s corn record production, with around 9.7 million tonnes harvested in 2022, impacts the increased supply of the product on the market, resulting in a price reduction. “However, crop failure in Argentina and the exchange rate issue may limit downward pressure,” says Conab market analyst Flávia Starling.

Source: Valor Econômico 

To read the source reporting, please see: https://valor.globo.com/agronegocios/noticia/2023/01/25/com-recorde-de-exportacao-preco-do-milho-deve-seguir-elevado.ghtml

Sharing is caring!