Brazilian caprolactam grade AS remains assessed at $125-130/mt CFR with little new business concluded. Buyers bidding at $129/mt CFR have been unsuccessful this week given limited quantities requested. Harvesting of the Safrinha crop in Brazil is making progress in Mato Grosso and Parana. In Mato Grosso reductions of 50% y/y in yield in certain areas are reported because of hot and dry conditions through key growing periods. While these production losses are partly responsible for the recent record high corn prices, they are likely to cause major issues for farm incomes. Farmers forward sold corn at unprecedented levels before the crop had been grown. Many farmers will not be able to fulfil these sold volumes, and will therefore need to 'wash out' the contracts at higher prices. This will impact farm margins and potentially fertilizer sales.
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