May 18, 2023

Brazilian Corn Producers Worried About Dry Weather, Low Prices

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

In addition to dry weather concerns, Brazilian farmers are worried that declining corn prices might make their 2022/23 safrinha corn crop unprofitable.

Planting of the 2022/23 safrinha in south-central Brazil was later than normal due to the delayed soybean harvest. The later planted corn will need adequate soil moisture through the end of June to reach its full yield potential. Unfortunately, the recent weather in south-central Brazil has turned dryer and there is little rain in the near-term forecast.

In the municipality of Candido Mota in southern Sao Paulo, the last rain was over three weeks ago and the corn is starting to show signs of moisture stress. For the corn to reach its full yield potential, it will need additional rainfall at the end of May and into June and July. The region would also need to stay frost-free until at least the end of June to avoid any frost damage.

Farmers in Candido Mota could make a good profit on their safrinha corn if they had high yields and a price in the range of R$ 75.00 per sack (approximately $6.80 per bushel). Unfortunately, the current corn price is R$ 50.00 per sack (approximately $4.50 per bushel) and falling and the current dry weather may negatively impact the corn yield potential.

The situation in the state of Mato Grosso is even more troubling. In the municipality of Canarana in eastern Mato Grosso, the current corn price is even lower at R$ 45.50 per sack (approximately $4.15 per bushel) and falling. At this price level and with the higher cost of production in 2022/23, farmers are not going to make a profit on their 2022/23 safrinha corn. Many farmers did not forward contract any of their anticipated corn production in early 2023 hoping for a better price. Unfortunately, prices have continued to decline since then.

If prices do not improve later in 2023, farmers may reconsider their plans for the 2022/23 safrinha corn production, which will be planted next January and February. Instead of corn as a second crop, they may consider grain sorghum or millet which are cheaper to produce.

As of May 13th, Conab reported that the 2022/23 Brazilian safrinha corn was 14% in vegetative development, 32% pollinating, 49% filling grain, and 4% maturing.