Nov 01, 2021

Brazil Finds Unexpected Late Corn Supply

Drought caused Brazil’s 2020/21 corn crop to be cut 20%

Brazil Finds Unexpected Late Corn Supply

  • Corn prices in Brazil have fallen in recent weeks on supplies from Argentina and fears in livestock exports.

  • It appears some farmers have been spooked enough to let go of some of their storage, which has weighed on prices.

  • There is also evidence some of the yield damage from last year’s drought was exaggerated, especially in Mato Grosso, Brazil’s biggest producing state.

  • Domestic prices have fallen to their lowest levels since June, and decreased FOB levels has led the country to be an attractive export option.

FBN’s Take On What It Means: Drought caused Brazil’s 2020/21 corn crop to be cut 20%, falling from a projected 110 million tonnes to 86 million. However, that may be revised upward somewhat with Mato Grosso seemingly not suffering as much as other states. The recent price deterioration has made Brazil an attractive supplier again, and a flurry of South Korean buying is likely to be sourced from the country.

FBN
FBN

Black Sea Wheat Comments

  • Russia’s wheat prices were up versus last week thanks in part to higher futures prices for Chicago and Paris wheat.

  • This marks yet another week of higher prices, which has been the trend for four consecutive months.

  • Russia 12.5% protein wheat was quoted around $317 per tonne (FOB) or up $5 per tonne versus last week.

  • Official export data for Russia only are published for August, which totaled 5.2 million tonnes and was undershot by the trade; Sovecon sees September exports at 4.3 million tonnes with October at 3.4 million.

  • If Sovecon is right, then exports to date would be down 1.4 million tonnes or about 10%, which is a much lighter volume than what others are reporting.

  • Ukraine has exported 12.4 million tonnes of wheat through October versus 10.6 million tonnes last year for the same period.

  • Recently, the Ukrainian government bumped the export limit up to 24.5 million tonnes; Ukraine’s harvest is up notably versus last year.

  • Winter wheat planting progress is lagging for Russia with the window of opportunity closing as winter approaches.

FBN’s Take On What It Means: Demand remains strong with Russia and Ukraine showing solid grain exports since the start of the marketing year. Russia is back in the game on GASC tenders with another on pending today. Winter wheat area likely will be flat in Black Sea countries given today’s prices versus a year ago, but we do need to see Russian producers make up for the delay in plantings. Overall, the situation remains supportive of global wheat prices.

FBN Market Advisory services are offered by FBN BR LLC, dba FBN Brokerage, FBN BR and FBN Market Advisory (NFA ID: 0508695)

The risk of trading futures and options can be substantial and may not be suitable for all investors. Past performance is not necessarily indicative of future results.

This is not an offer or solicitation in any jurisdiction where we are not authorized to do business or where such offer or solicitation would be contrary to the local laws and regulations of that jurisdiction, including, but not limited to, persons residing in Australia and Canada.


Kevin McNew

Recently Added to Buyer's Guide

Ultra Scoop

  • 20,000 bushels/hour
  • 40-foot inclined conveyor

TruGro Weight Management for Pets

  • Plant-based ingredient solution for pet food, treats, and supplements
  • Standardized, polyphenol-rich botanical extracts containing compounds naturally occurring in green tea leaves

Access Platforms

  • Anti-slip access platforms to reach elevated process equipment safely
  • Modular system includes braced frames which can be bolted to floor

HP FiberBoost©

  • Contains functional fibers produced specifically for dietetic use in piglets
  • Fiber stimulates gut and eases transition at weaning

Huve Check-Feed

  • On-site screening test to detect monensin, including Monovet® 90, in feedstuffs
  • Produces accurate, reliable results without adding microtracer particles to feed for detection methods

VM-13.3 G

  • Industrial-grade 13.3-inch LCD monitor
  • Full HD resolution: 1920 x 1080 (1080p/60)

Magazine

Marketwatch: Nov, 28

cmdty National Corn Price Idx: ZCPAUS.CM

open: 5.5712
high: 5.7406
low: 5.5262
close: 5.7276

cmdty National Soybean Price Idx: ZSPAUS.CM

open: 12.1595
high: 12.1807
low: 12.0432
close: 12.166

cmdty National Hard Red Winter Wheat Price Idx: KEPAUS.CM

open: 8.331
high: 8.4769
low: 8.226
close: 8.444

cmdty National Soft Red Winter Wheat Price Idx: ZWPAUS.CM

open: 7.7213
high: 7.8263
low: 7.6213
close: 7.7716