Apr 08, 2020

Farmers in Parana to Plant 4.7% More Wheat in 2020

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

Domestic grain prices in Brazil continue to be very strong due mainly to the weaker Brazilian currency. These strong prices include wheat, which is the only major crop for which Brazil is not self-sufficient.

The state of Parana in southern Brazil is the largest wheat producing state in Brazil and farmers in the state are preparing to plant their winter wheat starting in May. Farmers in the state are finishing their soybean harvest and many are booking record profits for their soybean production in the range of 50% for many producers.

Domestic wheat prices in Brazil have also been very good since last year due to a strong demand for wheat and tight supplies. Last year's wheat production in Brazil was severely impacted by adverse weather resulting in tight supplies. Brazil usually only producers about half of the domestic demand for wheat with the remainder being imported primarily from Argentina.

As a result, the Department of Rural Economics for the State of Parana (Deral) estimated on March 23rd that farmers in the state would increase their winter wheat acreage by 4.7% to 1.08 million hectares. The wheat acreage might have increased even more, but wheat and safrinha corn compete for some of the same acres in part of the state and corn prices are at record high levels as well. Generally, winter wheat is produced in the southern part of the state where temperatures are colder and safrinha corn is planted in the western and northern parts of the state where temperatures are warmer.

Deral estimated that the state's wheat production could total 3.4 million tons in 2020 or 39% more than last year. The increase would be the result of increased acreage and a 32% increase in 2020 wheat yields, which Deral estimates at 3,240 kg/ha (47.9 bu/ac). Farmers in the state will plant wheat during May and June and harvest the wheat during September and October. Since the new crop wheat won't be available until September, millers in the state are actively looking to import additional wheat supplies.

During the first three days of April, the price of wheat in the state was 7% to 23% higher than during the first three days of April 2019.