Nov 02, 2020
Soybean and Corn Prices Continue to Set Records in Brazil
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Spot prices for corn and soybeans in Brazil set another record high during the last week of October. During the month of October, domestic corn prices in Brazil increased 30%.
Last Wednesday for example, the future corn price hit a historic high of R$ 82.67 per sack (approximately $6.80 per bushel). Due to very tight domestic supplies, these high prices are expected to be maintained at least until the end of the year and maybe longer.
The record high prices are the result of strong domestic and international demand. There are also now concerns about the full-season corn production in southern Brazil that is being impacted by dry weather. Moisture stress is already evident for full-season corn planted in the states of Rio Grande do Sul and Santa Catarina. There are reports that some farmers in the region are considering tearing up their poorer corn fields and replacing it with soybeans whenever there is suitable soil moisture. There are also concerns about the safrinha corn, which will be planted later than normal due to delays in planting soybeans.
Harvesting the full-season corn will start in January, but it only accounts for about one quarter of Brazil's total corn production. The safrinha corn will account for about three quarters of Brazil's total corn production and harvesting of the safrinha corn will start next June.
October ended with another record high spot price for soybeans as well. The strongest domestic prices last week were found in the state of Mato Grosso do Sul where soybean prices hit R$ 172.00 per sack (approximately $14.00 per bushel).
A weaker real compared to the dollar contributed to the price increase as well as very tight available supplies. At the Port of Paranagua last week the spot price for soybeans was R$ 157.50 per sack and R$ 138.00 per sack for February 2021 delivery (approximately $13.00 and $11.40 per bushel respectively). At the Port of Rio Grande last week the spot price for soybeans was R$ 155.50 per sack and R$ 136.00 per sack for February 2021 delivery (approximately $12.85 and $11.25 per bushel respectively).
Nationwide, Brazilian farmers have already forward contracted 55% to 60% of their anticipated 2020/21 soybean production. By the time the harvest gets into full swing next February, it is estimated that as much as 70% of the soybeans will have already been sold.