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December 13, 2013

Corn Prices Strengthen Somewhat in Mato Grosso

Corn prices in Mato Grosso have strengthened a little during this past week averaging R$ 13.32 per sack (approximately US$ 2.60 a bushel) or an increase of 3.3% compared to the prior week. While encouraging, these prices are still well below last year at this time when corn was selling for R$ 19 per sack (approximately US$ 4.30 a bushel). The highest prices were found in eastern and southern parts of the state at R$ 16 per sack (US$ 3.16 per bushel) and the lowest was at Sinop (R$ 10.25 a sack) and Nova Mutum (R$ 12 a sack), approximately US$ 2.02 and 2.37 per bushel respectively.

With the increase in price, corn sales in Mato Grosso picked up a bit during the month of November. An estimated 2.34 million tons of corn were sold in the state during November and 70% of those sales were to the federal government through its various support programs.

The prices for corn in the state are still low enough that some farmers may opt to switch some of their intended safrinha corn acreage to additional soybeans instead. Normally a sack of soybeans in the state has a value 2-3 times higher than a sack of corn, but now a sack of soybeans is valued at about five sacks of corn. The economic incentive is there to plant more safrinha soybeans, but it remains to be seen how many farmers will ignore the advice of agronomist to not plant back-to-back crops of soybeans during the same growing season.

The lowest prices for corn in the state are the same areas where the majority of the safrinha corn is planted.