News — Persistent dryness across many parts of the second corn crop-growing states of Brazil has sent local as well as international prices soaring, while the rainfall forecast for the coming days is also not encouraging.
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Register NowFarmers fear a lower yield in the second corn crop could be more pronounced than earlier estimates had suggested.
"The delay in sowing and the irregularity of the rains have increased the uncertainties regarding the productivity of the crops of the second harvest, which has reinforced the increase in prices, which operate at record levels in many Brazilian markets," Centro de Estudos Avançados em Economia Aplicada (CEPEA) said in a note.
Moreover, in the domestic market, the low availability of corn due to a smaller first corn harvest and strong demand continue to boost prices.
"The holders of the cereal continue to retain grains or demand higher prices in view of expectations of new highs brought about by the possibility of drought in the central regions of Brazil," national agricultural agency Companhia Nacional de Abastecimento (Conab) said.
In Mato Grosso, the largest corn producer in Brazil, corn prices at the producer level have touched Real 77.6/60 kg ($237.83/mt), up 4.3% week on week and 108.3% higher than a year ago.
The futures corn contract on CBOT this week touched a near eight-year high.
The July corn futures contract on CBOT was at $6.68/bu at 04:05 CT, up 1.6% from the previous close.
The area of the corn crop in good condition in Parana, the country's second-largest producer, has dropped significantly, which will be reflected in the production estimate due for release on April 29, the state Secretariat of Agriculture and Supply said.
Concerns about the development of the second, or safrinha, corn crop, throughout the state of Goias is driving corn prices higher every week, and at this point, reports emerging from the state are not favorable for crops.
"With 30% of the crop planted outside of the ideal planting window, the low volume of rain forecast for May can greatly reduce the productivity of these crops," Instituto para o Fortalecimento da Agropecuaria de Goias (IFAG) said in a report April 26.
In Mato Grosso do Sul, 44% of the corn crop area is at a greater risk of adverse weather conditions such as drought and frost during its development.
The forecast of accumulated rainfall in Mato Grosso do Sul indicates that up to 160 mm of is expected in May and up to 100 mm in June, less than required during the crop's development cycle, according to the latest report released by the Association of Soybean Producers of Mato Grosso do Sul.
Almost a quarter of Brazil's second corn crop area was planted outside of the ideal planting window this season, exposing the crops to weather-related risks.
Since the beginning of the corn planting in February, rainfall has been deficient in the key corn-producing states of Brazil.
While the official forecast released earlier in April put the country's corn output at a record 109 million mt, many analysts now expect output to be revised in the coming days.
No rain relief
Rains favored crops in northern and western Mato Grosso and far western Mato Grosso do Sul over the weekend in Brazil, which led to minor improvements in soil moisture, but dryness remains fairly widespread across the safrinha corn belt.
"Dry weather is expected across the safrinha corn belt this week, with any showers limited to northern Mato Grosso," Maxar said in its daily weather report on April 26. "The dry weather will maintain dryness concerns across most of the region, stressing safrinha corn. Rainfall is expected to remain limited during the 6-10 day period, which will maintain crop stress."
In the Southern region of Brazil, rains are likely only in the center and south of Rio Grande do Sul with accumulations of around 30 mm during April 26-May 3, Brazil's National Institute of Meteorology (INMET) said.
"In the Center-West region, the largest accumulated rainfall of around 20 mm is forecast for northern Mato Grosso," INMET said. "In other areas of the region, rainfall will be sparse."
The Link LonkApril 27, 2021 at 06:09PM
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BRAZIL CORN MARKET WATCH: Local, international prices rise on persistent dryness - S&P Global
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