Brazilian market slows down with lower prices of corn at ports

Published Aug 19, 2024

Tridge summary

The Brazilian domestic market is experiencing support due to the devaluation of the Brazilian currency and a surge in corn purchases for immediate shipments, driven by a strong American climate and a favorable exchange rate. This situation has led to an increase in corn prices in Brazil, making it more expensive than its competitors, potentially inducing global demand for US corn and reducing interest in Brazilian corn. Producers are retaining a large portion of the current second crop, believing that domestic prices will rise above international ones, which is pushing stocks held by producers to be traded later and poses a risk of losing the ideal window for corn exports. Despite these challenges, Brazil has managed to increase its corn exports, with a target of 40 million tons for the year. The market is struggling to price corn above port levels, with the Brazilian corn currently being USD 25/ton above US corn prices.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

The domestic market has gained support space with the strong devaluation of the Brazilian currency and the unbridled attitude of traders in buying corn to meet short-term demand for shipments at national ports. An initial movement with the climate in the United States together with a very strong exchange rate in Brazil consolidated a support situation at the turn of the month. The completely opposite version of this scenario weighed on expectations last week. The dollar returned to BRL 5.50 and the CBOT lost the level of USD 4.00/bushel. There are limits to raising premiums above what they already are, so the result is a resumption of losses at ports. With the price of Brazilian corn more expensive than its competitors, global demand may be induced to buy US corn and reduce interest in Brazilian corn. Retention of more than 80 mln tons in the belief that domestic prices will rise above the international environment? This seems to be the Brazilian domestic market’s attempt in this ...

Source: UkrAgroConsult