Jul 14, 2021

NOAA Indicated La Nina Could Return, Impacting Brazil Planting

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

The most recent models from the National Oceanic and Atmospheric Administration (NOAA) indicate a potential reemergence of a La Nina over the next several months. If that were to occur, it would be bad news for south-central Brail. A return of La Nina could aggravate an already exceptional drought in south-central Brazil that has resulted in one of the driest periods in over 90 years.

NOAA puts the possibility of a La Nina at 51% during August-September and 66% during November-January. Meteorologists Andrea Ramos from the Brazilian National Weather Service (Inmet) indicated that if La Nina reemerges, it should be weak in intensity and short in duration. The major impact could be felt during the Brazilian spring and early summer.

Brazil has suffered for more than year from lighter-than-normal and irregular rainfall. Dryness last September and October delayed the soybean planting by a month or more, which in turn delayed the soybean harvest. A month of nearly constant rainfall during February delayed the soybean harvest even more, which in turn, delayed the safrinha corn planting.

The ideal planting window for safrinha corn usually closes about mid-to-late February, but some Brazilian farmers did not finish planting their 2020/21 safrinha corn until the end of March. The late planted corn was then impacted by an earlier-than-normal end to the summer rains and then a series of frosts at the end of June.

A reemerged La Nina could delay the start of the summer rains again in September and October. The area most at risk would be the south-central states of Mato Grosso do Sul, Parana, Sao Paulo, and Minas Gerais. The states less at risk would be the more northern states of Mato Grosso, Goias, Tocantins, and Maranhao.

The irregular weather has resulted in a 2020/21 Brazilian corn production twenty million tons below initial expectations, and it could decline even further. The tight corn supplies have resulted in record high domestic corn prices, reduced corn exports, and livestock producers scrambling to import needed corn supplies.

These high domestic prices were already expected to continue into early 2022. If a reemerged La Nina disrupts the weather during the 2021/22 growing season, Brazil could be facing very high corn prices for another 1-2 years before supplies can be rebuilt. Brazil is a major corn exporter, so if domestic prices stay high, Brazil may export less corn than expected, opening the door for higher U.S. corn exports.