South America Calling
Alastair Stewart South America Correspondent

Friday 05/23/14

Brazil's Second-Crop Corn

Corn has become an autumn and winter crop in many parts of Brazil over the last two decades, planted after summer soybeans.

Indeed, second-crop corn now accounts for around 55% of output.

But after a couple of years of rising acreage and excellent yields, this year's second crop has been more problematic.

Poor prices at the start of the year prompted many farmers to plant less second-crop corn this year.

In Mato Grosso, Brazil's No. 1 second-crop corn state, many other farmers gave up planting after rain delayed soybean harvesting and therefore planting of corn. Others planted anyway, causing 30% of the state's crop to be sown after the recommended window closed, according to Agroconsult, a local farm analytics group.

Poor rains in May across Mato Grosso have also affected the crop, which is less hardy because farmers have employed less technology to cut costs.

As a result, Mato Grosso second-crop output will decline 32% to 15.4 million metric tons, according to IMEA, a Mato Grosso farmer-funded research body.

In Parana, the No. 2 second-crop corn state in the south, area also fell significantly but the crop has benefited from excellent weather conditions thus far. As a result, the Parana state farm secretariat estimates production will reach 9.9 mmt, down just 3% on the year.

However, late planting means the state's crop is more susceptible than usual to frost in the cold months of June and July.

The other major concern is dry weather in Sao Paulo state, which accounts for 4% of the projected crop.

Overall, second crop output will drop 10.2% to 42.1 mmt, Agroconsult estimates.

Adding in summer production, total output will also be down by about 10% at around 74 mmt, forecasters estimate.

Farmers aren't selling much corn at the moment, awaiting spikes in prices linked to the U.S. weather market. In Mato Grosso, farmers have sold around 22% of the crop compared with 50% last year, according to Safras e Mercado, a local farm consultancy.

However, farmers will have to start selling at some point.

Brazil will need to export 2 mmt to 2.5 mmt a month between July and January to hit its target of exporting 20 mmt this season.

Next week, I will be traveling with the Rally da Safra crop tour through Mato Grosso, looking at the corn. Watch this blog for more detail on this interesting situation.


Posted at 2:00PM CDT 05/23/14
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