Corn market in Brazil with harvest progress and excellent export commitments

The harvest of the Brazilian second crop is advancing within its natural rhythm in properties, while the logistics are limiting this regional pace a little. At the same time, the queue of ships at ports surprises and shows a great start for Brazilian corn shipments. This harvest pace versus the second crop flow rhythm is the issue to be resolved in the interior of states in the coming few weeks, which may lead to regional price lows.

The Brazilian harvest is advancing. It is more accelerated in Mato Grosso, due to regional characteristics, and now is advancing in other states. The harvests will initially meet the contracts made for deliveries in July/August and September. There are still a lot of soybeans being shipped in July and August, along with corn arriving from the 2022 second crop. This is causing more difficult regional situations, such as in Goiás and Mato Grosso, as well as at the beginning of the harvest in Matopiba.

Therefore, a sales pressure condition due to this logistics framework must be considered normal and seasonal. But the batches do not seem to be formed in large volumes in the domestic market, as producers are delivering the contracts and trying to find space to retain the rest of the second crop. The portion of corn without space for storage will eventually go to the market to be sold within the next eight weeks.

The port is always the escape valve for Brazilian production. Last week, port levels dropped to 85/87 for August and September shipments. No matter how good this port liquidity may be (through exports), it cannot absorb all the volume and sales pressure that comes from a record-breaking second crop. Exports continue at excellent initial volume in the shipment schedule. After June shipments of around 2 mln tons, July has a shipment schedule of 6.5 mln tons, very significant for the first month of the second crop. August starts with 1.7 mln tons on the schedule. August and September are the months with the highest shipments.

The July and August schedule puts us with accumulated commitments of 12.5 mln tons this year. As August and September are not expected to have fewer shipments than in July, we can reach late September with 22 to 23 mln tons committed. So, we will have October to January to reach the target of 37 mln tons in the business year. Can exports be higher? Yes, but we need more sales from the domestic market for exports with shipments from October through January. This will be important so that corn does not occupy the space of the large soybean crop that is expected for 2023 from January.

Tags: shipments, volume, second crop, harvest, corn, Brazil, Production, порт