(Agrimoney) – Brazil cut its soybean harvest forecast, but raised expectations for corn output, citing the boost to northern sowings from the return of rains, and in the south from the support to prices from a regional supply deficit.
Conab, the official crop bureau, lowered by 1.18m tonnes to 100.9m tonnes its estimate for the newly-started Brazilian soybean crop, although this would still represent a record high.
The downgrade reflected a cut of more than 800,000 tonnes, to 27.5m tones, in the estimate for output in Mato Grosso, the top producing state, with Conab flagging the setback to yields from “volatile” weather, in particular dryness in some northern areas.
And replanting of failed crops had proved less widespread than expected, as had use of inputs, with oil market instability promoting cautious among producers.
‘Favourable market conditions’
Early season dryness had restrained dryness too in the north eastern agricultural frontier of Mapitoba – an acronym made up of the first two letters of the names of Maranho, Piaui, Tocantins and Bahia states.
However, rains returned in time for sowings of corn, which in the region has a later planting window than for soybeans, unlike in, for example, the US.
An upgrade of 581,000 tonnes to 28.35m tonnes in Conab’s estimate for Brazil’s harvest of first crop corn reflected increased estimates for north eastern areas.
In Bahia, for instance, for which the first crop corn harvest was upgraded by nearly 340,000 tonnes, the bureau flagged the boost to plantings from a “better supply of seeds, weather conditions observed in January, and the favourable market conditions for corn”.
Corn supply queeze
Brazilian corn prices have been buoyed by a market squeeze encouraged by the weak real, which has pulled supplies onto the export market, and created regional shortages for domestic livestock producers which has prompted the government to auction off supplies from state stocks.
Corn prices in the southern state of Rio Grande do Sul, for instance, have soared 45% year on year to some R$30-32 per sack, according to analyst Michael Cordonnier.
“Livestock producers are having to compete with exporters for a limited corn supply, thus the price increases,” he said.
Conab said that the squeeze on supplies is encouraging farmers in the southern state of Parana to sow extra second-crop, or safrinha, corn, which is planted on land cleared by the soybean harvest.
“Virtually all municipalities in the state should increase the area sown with corn,” the bureau said.
‘Grains deficit’
These extra plantings “will be important for the state’s supplies, since, with exports above the forecast for first-crop production, Paraná is in course for a grains deficit, a worry to the pig and poultry sector”, Conab said.
The forecast for Parana’s safrinha corn crop was lifted by more than 700,000 tonnes to 11.96m tonnes, an estimate in part offset by weaker northern eastern second-crop prospects, reflecting the reduced opportunity for safrinha corn presented by lower sowings of soybeans.
The estimate for the Mato Grosso safrinha harvest, Brazil’s second largest, was left unchanged at 19.93m tonnes, with Conab saying it was too early yet to detect a reliable trend in farmers’ planting intentions.
