Fears remain over Brazil corn, despite speedy soy harvest

February 6th, 2015

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Category: Grains, Oilseeds

Soybean.Corn-Fields450x299(Agrimoney) – The dryness which is enabling a faster-than-expected pace of soybean harvesting in Brazil is spurring concerns over plantings of the safrinha crop, for which the first official estimate may be revealed next week.

The Brazilian soybean harvest has – thanks to a shortfall rain in areas including many parts of Mato Grosso, the top producing state – defied expectations of a slow start, ideas provoked by a weather-delayed planting season.

As of last weekend, the crop was 6% harvested, in line with the figure a year before, according to consultancy AgRural.

In Mato Grosso, the harvest was 10.4% completed, nearly twice the expected rate, if in line with that last year, according to Imea, the state’s institute of agricultural economics.

“The soybean harvest is going much faster than expected because the dry weather has encouraged drydown of the crop,” Michael Cordonnier, the influential crop analyst, told Agrimoney.com.

Soil moisture worries

However, the institute has nonetheless stood by expectations of a drop of some 10-12% this year in sowings of safrinha corn, which is planted on land vacated by the soybean harvest.

While the pace of progress in safrinha crop sowings in Mato Grosso is keeping pace with average levels for now, “if rains are not forthcoming we will see a slowdown in plantings”, Dr Cordonnier said.

While rains have picked up in the last two weeks, “they are still below normal”, and “have not been heavy enough, at least not yet, to fully recharge the soil moisture across much of central Brazil.

“In many regions the soil moisture is below the 60% of capacity which is considered necessary for normal crop development,” he said, naming east-central Mato Grosso among the driest areas.

Dry outlook

And one worry for farmers it that the long range outlook “continues to forecast drier-than-average weather”, he said.

If the rainy season, which typically does not finish until late April, ends earlier than normal, “that’s a big problem” for Mato Grosso farmers who have sown after a plantings window which closes towards the end of this month.

The comments follow a caution earlier this week from the US Department of Agriculture bureau in Brasilia that “January has been unusually dry” in the centre west of Brazil, “which could signal an earlier end to the rainy season if the dryness continues into February”.

“Producers are concerned about the safrinha crop getting in the ground before the planting window closes.”

‘Dramatic reduction not expected’

The bureau added that one bonus for Brazilian growers was, relatively, high prices, with weakness in the real cushioning the dent from lower Chicago prices.

“Despite the potential for weather concerns… a dramatic reduction in [safrinha corn] production is not expected,” the bureau said.

However, Dr Cordonnier cautioned that any prospect of drier weather would alarm farmers who could face a significant drop in yields for what is a “high risk” crop, feeding through into a dramatic rise in the crop costs per tonne.

“Growers have had two years of good yields. But historically, it can be a lot lower.”

Data ahead

The comments come as investors are awaiting a report next week from the official Conab crop bureau which could give the first detailed estimates for the safrinha harvest – which is closely watched by investors as it is the primary source for Brazil’s corn exports.

Up to now, Conab has in its estimates carried across the safrinha sowings figure from last year.

The USDA bureau forecast an overall Brazilian corn harvest of 76.0m tonnes.

Conab currently forecasts a 79.1m-tonne drop, including 49.4m tonnes of second crop.

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