Last week was marked by the continuation of negotiations on the Black Sea agreement, planting of the 2nd Corn Crop and another drop in the expectation of Argentina's production. Given this, Chicago prices ended the week at $6.35 a bushel (+1.28%) for the contract due in May/23.

According to Ruan Sene, market analyst at Grão Direto, negotiations on the Black Sea grain export agreement continue and there is a consensus for renewal. But at this point, there is still a scramble over the extension of the agreement, in which Russia advocates a 60-day extension, while the United Nations, Turkey and Ukraine a 120-day extension.

According to him, a shorter extension period significantly increases the risks involving logistics for ships, considering that it takes, on average, 40 days to complete the entire loading and release process.

"The planting of the 2023 safrinha continues to progress, but had a slower pace in the week. According to the National Supply Company (Conab), there was an increase of 8.9% during the week, reaching 72.5% nationally. Despite the advance, it is still 14.9% behind the previous year. In general, the crops continue to develop, but they still need the continuity of the favorable climate," he explains.

Brazilian exports continue to be heated, compared to the previous year. According to the Secretariat of Foreign Trade (Secex), in just 8 working days of March, Brazil exported around 730,000 tons of corn, surpassing the 14,000 tons exported in every month of the previous year. This reinforces the continuity of international demand for Brazilian corn.

What to expect from the market?  

According to the analyst, the weather will continue to favor planting in Brazil during the week, but begins to present some doubts regarding the arrival of autumn in Brazil. The National Institute of Meteorology (INMET) points out that this season is characterized by the transition between the hot and humid summer and the cold and dry winter, especially in Central Brazil, in a scenario that may frustrate the expectation of record production.

"News about the renewal of the export agreement involving Russia and Ukraine could provoke movement in the quotes, especially if there is some kind of resistance or additional demands from any of the parties involved. The market expects the agreement to be renewed for another 120 days and corn exports to continue."

Brazilian prices, according to Sena, may continue to be pressured in the face of optimistic production projections in the country, and thus have a week of devaluation in relation to prices.

Source: RPA news