Corn prices likely to ease as harvest nears; sharp drop unlikely

Brazil’s spot corn prices are likely to ease as harvest gathers pace in the coming weeks, according to local government reports.

Buyers in Brazil have been waiting for the arrival of the second corn crop so as to be able to trade a higher volume because a potentially record harvest might pull prices down, S&P Global Commodity Insights said in its assessment report on May 31.

In Mato Grosso, corn prices fell to Real 67/60kg bag ($234.50/mt) on May 31 from Real 70.4/60kg a week ago, according to data released by the Mato Grosso Institute of Agricultural Economics, or IMEA.

The corn harvest in the second major crop-growing state of Brazil, which accounts for 92% of the cultivated area, was at 0.6% as of May 28, Brazil’s national agricultural agency Conab said.

Weather conditions have been favorable in Mato Grosso, the largest grain producer in Brazil, and the state is expected to produce a bumper harvest.

Corn harvest in Mato Grosso is still in the early stages and the dry weather condition is likely to favor field operations.

Corn yield from the initial batches has been excellent in Mato Grosso, reaching above 6.3 mt/ha, Conab said May 31.

Conab forecasts Brazil’s total corn production in the marketing year 2021-22 (February-January) at a record 114.6 million mt.

Brazil’s 2021-22 corn crop will be marketed from February 2022 to January 2023.

The first-corn crop in Brazil is planted from September-December and harvested over February-May, while the second crop is planted from February to March and harvested in June-July.

While corn prices are expected to fall in the near term as the harvest nears, a sharp drop in prices is unlikely.

“It is worth noting, that grain availability is lower in the world and the relaxation of phytosanitary agreements with Brazil by China should increase the demand for Brazilian corn and will support price in the second half of the year,” Conab said.

Brazil and China completed some key negotiations on starting Brazilian corn exports to China, Brazil’s Ministry of Agriculture, Livestock and Supply announced on May 23.

However, there is no clarity as to when China would allow imports of Brazilian corn into the country.

Tags: Production, yield, spot, second-corn crop, harvest, corn, Brazil, prices