Oct 06, 2020
Corn Prices in Southern Brazil hit R$ 70.00 per sack ($5.80 per bu.)
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
The price of corn last Friday in two cities in the state of Santa Catarina in southern Brazil hit R$ 70.50 per sack (approximately $5.80 per bushel) and prices will probably go even higher over the next two months.
The states in southern Brazil do not produce enough corn to meet the domestic demand, so they rely on corn imported from the states of Mato Grosso do Sul, Mato Grosso, and Goias to fill the void. The problem is that corn prices are rising in the producing states because supplies are extremely tight. The producing states supply the needed corn for the consuming states of Sao Paulo, Santa Catarina, and Rio Grande do Sul.
For example, price of corn in the city of Dourados, which is in southern Mato Grosso do Sul, hit R$ 55.00 per sack last week (approximately $4.55 per bushel). It cost R$ 11.00 per sack to transport the corn to Rio Grande do Sul (approximately $0.90 per bushel), so it cost a minimum of R$ 66.00 per sack when it arrives at the end user ($5.45 per bushel).
The prices are expected to continue increasing until some of the full-season corn starts to be harvested in late December. The corn prices in Santa Catarina are expected to rise gradually to R$ 73.00 per sack by the end of October (approximately $6.03 per bushel) and R$ 75.00 per sack by the end of November (approximately $6.45 per bushel).
By the end of December, some of the full-season corn will start to be harvested, but volumes will probably not be enough to push prices lower until more of the crop is harvested in January. Additionally, Brazilian farmers made record profits on last year's soybean, corn, and wheat production, so they are well capitalized and in no hurry to sell any of their remaining grain supplies.