Inor Ag. Assmann
34
T
he great question taken into
consideration for projecting the
future price scenario and corn
sales in Brazil is the fact that
there will be a great surplus of
grains in the 2016/17 crop year. The Na-
tional Food Supply Agency (Conab) antici-
pates a stock of 20.5 million tons from the
2016/17 season to the 2017/18 season, in
spite of the optimistic expectations regard-
ing exports in 2017 and a surge in domes-
tic consumption, notwithstanding the neg-
ative impacts coming from the Weak Meat
Operation scandal, investigated by Federal
Police; the suspension of fresh beef imports
by theUnited States; the exchange rate hur-
dles and the external scenario.
Thissurplusrepresents150percentinthe
national stocks, a factor that pushes prices
down. “Should no extraordinary fact occur,
likeafailureinthecropoftheUnitedStatesor
of the second crop in Brazil in 2018, or a new
wave of depreciation of the Brazilian curren-
cy, the trend is for two years of very low corn
pricesintheCountry,projectsRubensAugus-
to de Miranda, researcher at Embrapa Corn
andSorghum, inSeteLagoas (MG).
After the vertiginous drop in corn prices,
which reached 60 percent in some regions in
theCenter-West, the2017/18 summer crop is
supposed to be smaller in area and produc-
tion. According to him, the absence of new
facts that point to a robust improvement in
the value of the commodity in the short and
medium run confirms the trend that the ce-
real will lose ground in the 2017/18 summer
cropandsecondcrop in2018.
“However, without considering a con-
siderable increase in exports for the stocks
to go down to a level at which they exert no
pressure upon the prices, it would be nec-
essary for the volumeof the2017/18 crop to
remain below 60 million tons”, he declares.
“Due to this unlikely scenario, it is not out
of the question to consider up to two years
of low prices for the cereal, before any sub-
stantial recovery takes place.”
ThoméLuizFreireGuth,fromConab,un-
derstands that this scenario should confirm
the trend that summer crop corn producers
will prefer soybean to corn, especially in the
Center-South regions, as there is a high risk
of losing money if investments are made in
corn. “In some places, selling corn for R$ 20
is enough to pay the bills, but in the South,
any price below this, translates into losses”,
he says. The summer crop should concen-
trate more on soybean, whilst the second
crop will equally depend on other factors,
likeweather conditions.
n
Under
pressure
With prices running lowand
nationalstockssurging150percentinthe2016/17cropyear,
thetrendisforareductioninplantedareainthenextseason
Only adrastic drop in production or a leap indemandwould change prices
