Brazilian corn crops -- which have already seen significant production losses in 2020-21 -- are facing further damage from frost conditions observed in the southern parts of the country, with weather forecasts indicating that the conditions may continue throughout the week.
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Register NowAt dawn on June 29-30, temperatures are likely to be below zero degrees Celsius in Rio Grande do Sul, Santa Catarina and the south of Parana. During this same period, there is even the possibility of snowfall in the mountainous areas, especially in Santa Catarina, Brazil's National Institute of Meteorology, or INMET, said in its forecast.
Throughout this week, favorable weather conditions for moderate to strong frost formation is likely to persist in southern Brazil, Mato Grosso do Sul and may extend to Sao Paulo and Minas Gerais, IMNET said.
The delayed planting of the second corn crop in Brazil this season has exposed a large area of corn crop in the country to frost damages.
"We expect that, if the frosts occurs, we might expect a 2mT [million mt] reduction on total production [in the affected region]," one market participant said.
In Parana, the second-largest producer of corn in Brazil, only 1% of the second corn area has been harvested, according to the latest update by Parana's state agriculture and livestock department.
"It is expected that approximately 25% of the second-crop corn at the early stage of maturation will suffer light damage from frost, while approximately 75% of the cultivated area, which is at more frost-sensitive crop development stages, will see significant yield losses," the report said on June 28.
The possibility of more losses comes on the heels of the reduction in the second corn production estimate by the Parana agriculture department last week.
Parana's second corn crop production is estimated at 9.8 million mt in 2020-21, down 33% from the initial estimate and down 19% year on year, the agriculture department said.
The most active corn futures contract on the Brazilian stock exchange B3 hit the upper limit at Real 87.61/60 kg on June 28 due to fears of crop damage due to drought.
In the last 12 months, the average monthly corn price in Brazil for each month was higher than the previous month except for December.
CORN PRICE RECEIVED BY PRODUCERS IN BRAZIL IN REAL/60 KG
Lucas do Rio Verde/Mato Grosso
Londrina/Parana
Passo Fundo/Rio Grande do Sul
Uberlandia/Minas Gerais
Source: CONAB
CEPEA corn indicator
The current weather risks to crop is likely to arrest the slide in corn prices observed in Brazil over the last two weeks as the local corn supply situation improved slightly with the progress of harvesting operations.
Brazil second corn crop harvest in the nine states which accounts for nearly 92% of the area touched 9.8% as of June 26 as compared to 16.1% around the same time last year, Brazil's national agricultural agency CONAB said in its latest weekly report.
Second corn harvesting in the major producing states of Brazil
June 27
2020 in %
June 19
2021 in %
June 26
2021 in %
Minas Gerais
Mato Grosso do Sul
Mato Grosso
Brazil's 2020-21 (February 2021 to January 2022) corn production forecast was cut to 96.39 million mt from 106.4 million mt projected in May by CONAB due to drought.
Brazil produced a record 102.586 million mt of corn in the 2019-20 season.
The US Department of Agriculture's Brazil attache lowered its 2020-21 corn production forecast by 11 million mt to 94 million mt -- which will be marketed between March 2021 and February 2022.
The USDA's attache also reduced its Brazil corn export forecast for 2020-21 by 10 million mt to 27 million mt, which would represent a 23% decrease year on year.
Brazil is the second-largest corn exporter in the world following the US.
The Link LonkJune 29, 2021 at 07:14PM
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BRAZIL CORN MARKET WATCH: Crop loss concerns mount on frost forecasts - S&P Global
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