Oct 01, 2020
Corn Prices in Mato Grosso continue to Set Record Highs
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Corn farmers in Mato Grosso are looking at extremely good profit margins for their 2020/21 safrinha corn, which they will plant next January and February. The price of corn in Mato Grosso has risen 107% compared to this time in 2019/20 and 255% compared to 2017.
The Mato Grosso Institute of Agricultural Economics (Imea) indicated that the price for forward contracting of the 2020/21 corn thus far has averaged R$ 34.44 per sack (approximately $2.95 per bushel), but recent prices keep increasing and last week the price for corn in Mato Grosso averaged R$ 48.86 per sack (approximately $4.20 per bushel). For farmers who barter for their inputs, these high prices mean they need less corn to purchase their needed inputs.
Imea reported that if you use the average price of 2020/21 corn sold thus far, farmers would need to commit 54.09 sacks of corn (57.9 bushels) to purchase a ton of fertilizers with an average price of R$ 1,862.88 per ton (approximately $351). For last year's crop, farmers had to commit 68.92 sacks of corn (73.8 bushels) to purchase a ton of fertilizers. Imea commented that this is the best opportunity ever seen for farmers in Mato Grosso to lock in their input costs for their next corn crop.
Every week there are new record high corn prices in Mato Grosso driven by the demand for corn to produce ethanol, the livestock sector where there are record cattle and hog prices, and increased exports especially to China. The exports are being driven by the devaluation of the Brazilian currency compared to the U.S. dollar, which make Brazilian products very competitive on the world market. Corn prices in Mato Grosso are expected to go even higher over the next few months as corn supplies tighten even further ahead of the next safrinha corn harvest which will not start until next June.
Farmers in Mato Grosso will plant their safrinha corn after the soybean harvest next January and February. Currently, the soybean planting in Mato Grosso is being delayed due to dry weather and there is some concern that farmers may not be able to plant their safrinha corn before the ideal planting window closes about the third week of February. But at these record high prices for corn, they can afford to plant corn after the ideal window has closed, even if their yields may be negatively impacted.