Oct 15, 2021

Cotton Acreage in Mato Grosso, Brazil to Increase 13.3%

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

In their first estimate of the 2021/22 cotton production in Mato Grosso, the Mato Grosso Institute of Agricultural Economics (Imea) estimates that farmers in the state will increase their 2021/22 cotton acreage 13.3% to 1.09 million hectares (2.69 million acres). Mato Grosso is Brazil's largest cotton producing state and increased cotton acreage is being encouraged by record high domestic cotton prices in Brazil.

Additionally, cotton farmers are encouraged by the rapid soybean planting in the state. Imea reported late last week that farmers had planted 20.3% of their intended soybeans compared to 3% last year and 12% average. This should allow for the 2021/22 safrinha cotton to be planted within the ideal planting window which will close at the end of January.

Cotton yields in Mato Grosso are expected to increase 3.2% compared to last year with a total fiber production estimated at 1.93 million tons.

Safrinha cotton competes with safrinha corn for acreage in Mato Grosso, so an increase in cotton acreage might partially limit the increase in safrinha corn acreage. Conab expects the 2021/22 cotton acreage in Mato Grosso to be 1.06 million hectares (2.6 million acres), while they expect the safrinha corn acreage in the state to increase to be 6.27 million hectares (15.4 million acres). Therefore, the safrinha corn acreage in Mato Grosso is approximately 6 times larger than the safrinha cotton acreage.

Last year, some of the intended cotton acreage in the state was switched to corn due to the delayed soybean harvest. That is not likely to occur this growing season, in fact, just the opposite might occur.

Imea reported that the spot price for corn last week in Mato Grosso was R$ 72.27 per sack ($6.08 per bushel). The corn basis in Mato Grosso declined 39% compared to the week before to R$ 3.35 per sack above the Chicago Board of Trade price or $0.28 per bushel.