Jun 16, 2020

2019/20 Brazil Safrinha Corn 5.5% Harvested

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The safrinha corn in Brazil was 5.5% harvested last Friday compared to 10% last year and 4% average according to Arc Mercosul. This represents an advance of about 3% for the week. The early harvest progress is slower than last year, but the harvest pace last year was the fastest on record.

The 2019/20 Brazilian corn crop is hard to judge because the increased acreage and generally acceptable yields in Mato Grosso and Goias could help to compensate for the lower acreage and expected disappointing yields out of Parana and Mato Grosso do Sul. There have already been three episodes of frosts in southern Brazil, but they did not occur in the safrinha corn areas, which is good. The forecast is calling for another chance of frost next week, so let's see if the safrinha corn can get lucky once again.

Mato Grosso - Farmers in Mato Grosso had harvested 8.3% of their safrinha corn as of last Friday compared to 16.8% last year and 7.8% average according to the Mato Grosso Institute of Agricultural Economics (Imea). The fastest harvest pace is in the mid-north region where 11.5% of the corn has been harvested. The slowest harvest pace is in the northeast region where 3.4% of the corn has been harvested. Corn yields continue to be variable across the state with some yields better than last year and some yields lower than last year.

In the municipality of Campo Novo do Parecis, which is located in western Mato Grosso, the safrinha corn is 20% harvested and farmers are reporting yields 10% to 15% less than last year. Corn yields thus far are in the range of 100 sacks per hectare (92.4 bu/ac). The President of the Rural Syndicate indicated that the rainfall was irregular during the growing season with some areas staying dry for up to 24 days.

The President of the Rural Syndicate is reporting that farmers in the municipality have sold 60% of their anticipated corn production, but their revenues may be disappointing due to the lower yields and the fact that they bartered some of their future production for the inputs needed to produce the crop when corn prices were much lower. Domestic corn prices in Brazil reached record high levels earlier this year with the significant devaluation of the Brazilian currency. The currency has since strengthened somewhat compared to the dollar.

Imea reported that as of the end of May, farmers in the state had sold 85.1% of their anticipated safrinha corn production. The spot price for corn in the state last week was R$ 35.57 per sack (approximately $3.30 per bushel). Farmers have also been aggressive sellers of the 2020/21 anticipated corn production as well with 35.1% sold by the end of May. This represented an advance of 5.6% during the month of May. The price for the 2020/21 crop has averaged R$ 28.26 per sack (approximately $2.60 per bushel).

Parana - According to the Department of Rural Economics (Deral), farmers in Parana had harvested 3% of the safrinha corn as of earlier last week. Deral rated the corn in the state at 17% poor, 40% average, and 43% good. The safrinha corn in Parana is 22% pollinating, 55% filling grain, 22% mature, and 3% harvested.

In the municipality of Assis Chateaubriand, which is located in western Parana, the safrinha corn was planted very late and yields are expected to be down 40% to 50% due to dry weather with some fields maybe a complete loss. Farmers in the region are concerned that a frost any time during the next 30 days could make the losses even worse. Many farmers have already opted to collect crop insurance on their safrinha corn.

Goias - In the municipality of Rio Verde, which is located in southwestern Goias, the safrinha corn harvest should start about July 1st when the grain moisture hits 18%. The yields of the earlier planted corn should be OK, but the corn planted after March 1st could see yield declines of 20% due to irregular rains during April and May. Last year, the average yield in the state was about 120 sacks per hectare (110.8 bu/ac). More than half of the corn crop in the municipality has already been sold, but farmers are expected to hold onto much of their remaining production due to declining corn prices.

In their June Crop Report, Conab lowered their estimate of the 2019/20 Brazilian corn crop by 1.3 million tons to 100.9 million. They lowered their estimate of the safrinha corn production by 1.6 million tons to 74.2 million. Dry weather in the southern production areas was the primary reason for the lower safrinha corn production.

The consulting firm Consultoria DATAGRO estimates that Brazilian farmers have sold 62% of their anticipated safrinha corn production compared to 54% last year and 52% average. This percentage of sales is not quite as high as the previous record of 67% set in 2016.