CEPEA: ESALQ/BM&FBovespa Index for corn rises 1.9% in October to close at 24.77 reais/60-kg bag
November 7, 2013
– After moving up in the entire October in most regions surveyed by Cepea, corn prices resumed weakening at the end of the month. The decrease is attributed to the good pace of planting in Brazil, some refrained purchasers and perspectives of a record crop in the United States, which may allocate the international demand to that country.
In any case, the Brazilian market still searches for an aspect to give prices a direction. Contract oscillations at BM&FBovespa indicate different players’ perspectives. Price decreases in the international market and at Santos (SP) and Paranaguá (PR) ports also reinforce market uncertainties.
In late October, for instance, quotes in Paranaguá were 1.4 real per bag below those in Campinas (São Paulo). In case prices at ports continue to move down, decreases may be transferred to other regions in Brazil. Cepea data indicate that the product in Paranaguá moved down 1.6% between October 24 and 31. For November and December, prices might be between 24.50 reais and 25.00 reais per 60-kilo bag.
Among states surveyed by Cepea, most significant price decreases have been verified in São Paulo, Mato Grosso and Rio Grande do Sul. In the São Paulo market, drops are attributed to refrained purchasers and flexible behavior of some sellers. In Mato Grosso, the significant demand in the auction promoted by Conab (National Company for Food Supply) at the end of October led purchasers not to have immediate needs to buy in the state. In Rio Grande do Sul, producers are focused on planting activities and only a few purchases have been closed outside the state.
An alternative that could help change the current scenario would be the fact of having a significant export increase and/or a sharp supply decrease in the 2013/14 crop.
In October, the ESALQ/BM&FBovespa Index for corn (Campinas-SP region; cash price, using the CDI discount rate) upped 1.89% and closed at 24.77 or 11.10 dollars per 60-kilo bag on Oct. 31. Considering the NPR discount rate, prices in Campinas-SP region (cash price) closed at 24.42 reais or 10.94 dollars per 60-kilo bag, for an increase of 2.35% in the same period. (Cepea – Brazil)