Brazil: corn output likely to fall below 90 mil mt in 2020-21

Brazil’s corn production is likely to be below 90 million mt in 2020-21, significantly below 102.5 million mt of output in 2019-20, according to the most recent reports from various agriculture departments of corn growing states, as the crops have faced unfavorable weather conditions since the beginning of the new crop season.

The 2020-21 corn crop will be marketed during February 2021-January 2022.

“Corn production in Brazil in the 2020-21 harvest is expected to be less than 90 million mt,” Parana’s state agriculture department said in a recent report. “The last CONAB report pointed to production of 93.4 million mt; however, there are weather impacts that will invariably reduce this number in the future report.”

There is a forecast for frost formation in Parana, the second-largest corn producer in Brazil, and in the extreme south of Mato Grosso do Sul on July 28, Brazil’s National Institute of Meteorology (INMET) said.

There is a forecast for widespread frost on July 29 in practically the entire southern region and southern Mato Grosso do Sul, INMET said.

There is also a forecast for frost in Minas Gerais and in isolated parts of southern Goias on July 30, INMET said.

“As for the corn crop, according to the grain coordinator at IDR-Parana, Edivan Possamai, there is not much that can be done to protect [the crop] and the damage [due to frost] can be great since it is a summer crop,” the Institute for Rural Development of Parana and local weather department said in a note.

Corn crop planting was delayed this year and a large area of corn was planted outside of the ideal sowing window, which exposed the crops to the risk of frost damage.

While fears of frost damage have been present since the beginning of the season, drought during the crucial crop development stages took a heavy toll on the corn yield.

As feared, the first frost in the key corn-growing states of Brazil hit the crops towards the end of June, followed by another round of frost events last week.

The corn crop yield in Mato Grosso, the largest corn producer in Brazil, has also been lower than initial estimates.

“The harvest in some regions is entering its final stretch and the reports of yields in these areas show a decline,” the Mato Grosso Institute of Agricultural Economics (IMEA) said in its latest report.

The average weekly productivity in Mato Grosso has been below 95 sacks/hectare [1 sack = 60kg] so far and yields may see greater reductions in the coming days since the new harvesting areas were planted late, IMEA said in the report.

Harvesting of Brazil’s second corn crop is currently in progress.

The second corn crop harvest across nine states, accounting for nearly 92% of the area, was 41.3% complete as of July 24 as against 54.3% around the same time last year, CONAB said in its latest weekly report.

Corn prices in Brazil crossed real 100/60 kg in the local and futures market last week even in the middle of the peak harvest season supported by mounting concerns on the size of Brazil corn crop.

“Concerns about the weather in the corn-producing regions of Brazil and the US have boosted prices for the cereal, given that recent frosts and forecasts of a new cold front in Brazil and dry weather in the US can reduce the productive potential of crops. In this context, Brazilian sellers are reluctant to negotiate at lower prices, reducing internal liquidity,” Brazil-based Center for Advanced Studies on Applied Economics (CEPEA) said in a note.

Corn buyers are struggling to find grains for immediate delivery, so domestic prices continue the strong upward trend despite the recent fall in international prices, CONAB said in its weekly report.

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Tags: corn, Brazil, corn production, Production, forecast