Brazil Seen Planting Largest Corn Area in History on Firm Prices, Demand

(Financial Post) – Brazilian farmers are expected to plant more than 18 million hectares of corn in the 2019/20 season, a 3.5% rise from the previous cycle and the largest area on record, according to a Reuters poll.

Despite weather risks stemming from late planting of Brazil’s second corn crop, total output may reach 101 million in the season, according to the average of 12 analysts’ estimates.

If the average projection is confirmed, Brazil’s corn output will be almost 1% above the government’s estimate for the previous season, and the highest in history, according to poll data.

Sowing of Brazil’s second corn crop, which is cultivated after soybeans are harvested, will extend well into March in some areas because of delays in the soybean harvest.

Yet according to analysts, good corn prices will encourage farmers to expand acreage despite potential weather issues affecting the second corn crop, which represents about 75% of Brazil’s entire output.

“If it rains in February and March and the price is high, as it should be, the producer will plant more corn,” said analyst Paulo Molinari at Safras & Mercado.

In high demand in export markets, domestic demand for Brazilian corn has been strong as meat-packers and biofuel producers step up purchases.

After an export binge this year, Brazil’s corn inventories will be tight or potentially insufficient to meet local demand early in 2020.

SOURCE CORN OUTPUT AREA

2019/2020

MLN TONNES MLN HA

Agroconsult 102.40 18.00

Arc Mercosul 96.30 18.10

Céleres 103.90 18.11

Cerealpar 100.00 –

Cogo 103.40 17.90

Conab 98.36 17.53

Datagro 103.30 18.20

Rabobank 99.00 18.40

Refinitiv 100.10 18.10

Safras & Mercado 103.40

T&F Consultoria 101.07

USDA 101.00

AVERAGE 101.02 18.10

highest estimate 103.90 18.40

lowest estimate 96.30 17.53

Conab 2018/19 100.05 17.49

% change vs govt’s estimate +0.97% 3.49%