Opinion – Shuttle: Record corn exports bring stocks down to 2 million tons

With the external market data for January already defined, Brazil should end the commercial year with a carryover corn stock below 2 million tons, a volume not registered for many years.

Conab (Companhia Nacional de Abastecimento) forecasts a total supply (initial stocks, production and imports) of 123.8 million tons in the period from February 2022 to January 2023.

National consumption (75 million tons) and exports (47 million) add up to 122 million. There remains 1.8 million to be incorporated into the volume of the new crop. Unless there is an upward revision of production or a downward revision of consumption.

On the supply side of this cereal, there are doubts about the production and export potential of Argentines and Ukraine’s difficulties to export. Brazil is the main supplier at the moment, since the US producer is reluctant to sell his product, waiting for better prices, according to Daniele Siqueira, an analyst at AgRural.

Even with a super harvest of soybeans and corn predicted in Brazil, prices in Chicago remain at good levels. Uncertainties in the production and export of grains from Argentina keep the market on alert.

The March soybean contract was traded at US$ 15.15 per bushel (27.2 kg) this Tuesday (7), a value close to the historical high of US$ 15.72 for this contract, registered on 19 June 2022.

The January rains in Argentina alleviated the bad scenario for the country’s soy producers a little. Even with the rain, however, it is still difficult to assess the production.
The soybean harvest is long in Argentina and only during February will it be possible to better define the volume to be produced, says Daniele.

The market still works with very diverse numbers, ranging from a production of 37 million to 45.5 million tons. This last data is from the USDA (United States Department of Agriculture).

For Daniele, the Argentine soy harvest should be below 40 million, which would be a volume far from the potential of 48 million to 50 million tons.

In Brazil, despite the drought in Rio Grande do Sul and in specific areas of Paraná and Mato Grosso do Sul, the harvest should exceed 150 million tons, which helps cover the Argentine deficit.

The uncertainties in Brazil are related to the development of the harvest, which is delayed. Data from AgRural indicate that until the beginning of February, only 9% of the area destined for oilseeds had been harvested, down from 16% a year ago. In Paraná, the machines passed through only 2% of the area, much less than the 15% of the previous harvest.

Although North American producers are keeping an eye on this delay in the Brazilian soybean harvest, which could compromise the ideal period for corn, the AgRural analyst says that it is still too early to assess the effects of this delay.

An eventual reduction in the Brazilian corn harvest would favor producers in the United States, who delayed sales of the cereal, waiting for better prices.

Corn, like soy, also has a high price level in Chicago. This Tuesday, it ended the trading session at US$ 6.74 per bushel (25.4 kg), not far from the high of US$ 7.12 of October 23 of last year for this contract.

Contradicting… Jair Bolsonaro wrote on a social network that “the value of exports [do agronegócio] went from BRL 68 billion in 2018 to BRL 82 billion in 2021”, in view of the country having reached new markets and increasing the number of products sold.

…himself The Ministry of Agriculture informs, however, that agribusiness exports in 2018 surpassed, for the first time, the level of US$ 100 billion, totaling US$ 101.2 billion.

…government As for 2021, they rose to US$ 120.5 billion. The Ministry already has the export revenues for 2022 available, which reached US$ 159.1 billion.

Agricultural machinery Sales totaled 67,400 units last year, 19.4% more than in 2021, according to Anfavea. In the same period, exports rose to 10.6 thousand units, 7.6% more than in the previous period.

Agricultural machines 2 This year, however, performance should be weaker. The industry association forecasts a drop in sales to 65,000 units, 3.5% less than in 2022, and a 13% decline in exports, to 9,520 units.

Inflation Wholesale prices of agricultural products fell 0.56% in January, according to the IGP-DI. Among the hikes were beans, cassava and rice. On the list of falls are soy, poultry, beef and fertilizer.