The director of the consultancy Céleres, Anderson Galvão, projects a cycle of high prices for commodities. “We are once again going through the beginning of a rising prices cycle for commodities, soybeans, corn and ore, which is due to the devaluation of the dollar. This does not depend on supply, whether it rained or not. It is a macroeconomic movement changing the price of agricultural commodities”, says Galvão. He adds that prices in a short term have been affected by the climate and global demand. “In addition to commodity market itself, there is a climate uncertainty in South America associated with La Niña, besides a strong global demand for cereal. External and internal factors explain part of the high prices for soybeans and corn”, he says. China may also play an important role in the import of corn, according to the director of Céleres. He warns that the main risk for quotes is the exchange rate and not the prices in Chicago. “Producers have to keep in mind that a large part of commodity values comes from the exchange rate. Any macroeconomic adjustment in Brazil should result in Real exchange rate appreciation”, he concludes.

Source: Canal Rural

*Translated by Ia Niani