World grain stock increases, inhibiting price rise – 02/01/2024 – Vaivém

The rebuilding of world grain stocks continues in 2023/24, which further inhibits a rise in international commodity prices.

This is what data this Thursday (1st) from Amis shows, a system that provides a market synthesis of the ten main entities that monitor the sector, including the FAO (Food and Agriculture Organization of the United Nations).

The system monitors the performance of wheat, corn, rice and soybeans, indicating production, demand, international market, stocks and prices of these products.

At the end of the 2023/24 harvest, there will be 315 million tons of corn left in the world’s warehouses, a volume 10% higher than in 2022/23. These final stocks represent 26% of world consumption.

The volume of wheat at the end of the harvest remains stable at 320 million tons, but represents 40% of world consumption in 2023/24. Rice, with a strong upward trend on the international market, keeps stocks stable at 199 million tons, a volume that covers 38% of world demand.

Soybeans, the product that most worries Brazilian producers at the moment, due to the constant price reduction, will see a 14% increase in final stocks this harvest.

There is a crop failure in Brazil, but production is recovering in other countries. Final stocks are sufficient for 13% of world consumption, which reaches 389 million tons.

Worldwide evolution of harvests and the consequent replenishment of stocks force a drop in international prices. Corn, whose production rises to 1.21 billion tons in 2023/24, saw a 30% price reduction in January, compared to the same period of the previous year.

Soybeans accumulate a drop of 23%, and wheat, 22%. Rice, despite maintaining a high production of 525 million tons, continues to see rising prices due to barriers imposed by large exporters, such as India.

In Amis’ assessment, the grain transport system is going through a period of stress, both due to climatic and geopolitical problems.

Recent droughts have caused a reduction in navigability on the Rhine, in Germany; in Mississippi, in the United States; in Tapajós, in Brazil, and in the Panama Canal.

Geopolitical conflicts pose problems to navigation in the Black and Red Seas, increasing the cost of shipping from Europe to Asia and vice versa. This is a point that could affect prices while these conflicts last.

Signal yellow Rains concentrated in a few regions and intense heat raise a warning signal in Argentina. The harvest estimate of up to 52 million tons of soybeans may not be confirmed, and the volume may be less than 50 million, according to some estimates.

Credit BNDES will allocate R$800 million for the construction of a soybean crushing unit for the Copasul cooperative, in Naviraí (MS).

Credit 2 The bank will also make a contribution of R$175 million in an investment from a fund, in partnership with AGI Brasil, to purchase equipment for grain storage

Corn Many producers may migrate to more profitable or safer crops this year, such as cotton and sorghum, given the unfavorable scenario for corn, according to consultancy Céleres.

Corn 2 As a result, winter production is expected to fall by 9 million tons, reducing export potential. According to the consultancy, foreign sales are expected to fall to 50 million tons this year.

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