With each season, it becomes clearer that just increasing production does not guarantee profitability and the effects of successively record crops impact price formation. While part of the market tries to find a culprit for the current situation and prices, the other part focuses on the real picture and the need to dispose of the giant upcoming second crop. A few crops are starting to be reaped in Mato Grosso, but the actual harvest should start with larger volumes from mid-June. The adaptation of prices to the reality of the port and the quick destination for exports is the only way to rebalance the internal market. The government’s action, without a doubt, will not change the market environment, may lead to more pressure from external prices, and may delay the flow of exports from Brazil. Letting the market adjust naturally looks like the most coherent path for corn going forward.
Original content
With each season, it becomes clearer that just increasing production does not guarantee profitability, and the effects of successively record crops impact price formation. While part of the market tries to find a culprit for the current situation and prices, the other part focuses on the real picture and the need to dispose of the giant upcoming second crop. A few crops are starting to be reaped in Mato Grosso, but the actual harvest should start with larger volumes from mid-June. The adaptation of prices to the reality of the port and the quick destination for exports is the only way to rebalance the internal market. The government’s action, without a doubt, will not change the market environment, may lead to more pressure from external prices and may delay the flow of exports from Brazil. Letting the market adjust naturally looks like the most coherent path for corn going forward. Just increasing production does not guarantee profitability and market agents should guarantee this ...
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