In Brazil, it’s time to pay attention to “safrinha” corn

With half of the soybean harvest complete in Brazil by Mar 5, it is time, again, to take a look at the second corn crop, also known as “safrinha”, which is being planted later than normal due to a delay in the soybean crop, caused by irregular rains in the last quarter of 2019.

Until last week, 80% of the projected area had been planted in south-central Brazil, in line with the five-year average, but only because top producer Mato Grosso has nearly finished sowing, according to AgRural data. In other states, the ideal window is already closed or about to end and farmers are working at full steam to avoid planting a large area during the second half of March.

Riskier crop
The late planting makes the second corn crop more susceptible to yield losses caused by dryness and/or freezing temperatures during pollination and grain filling. Despite the delay, Brazil is likely to increase its area by around 3%, thanks to very attractive prices – a result of strong demand and a weakening Brazilian real against the dollar. A drier pattern forecasted for this month, however, might make farmers think twice about planting all the area they have in mind.

Potential production
If producers plant the area initially estimated and weather conditions favor the crop development, the second corn crop production will reach something around 73 million metric tons, not far from the record harvested in 2019, when conditions were nearly ideal across the country.

That production, combined to the first crop (40% harvested until last week, with terrible yields in the dry Rio Grande do Sul, but very good prospects elsewhere) and the third crop (grown in marginal states for local use) would put Brazilian total production close to 100 million metric tons, like last year.

Exports, still a mystery
Brazilian corn exports largely depend on the size of the second crop. And, since this year the second crop is riskier because of the late planting, we will probably see a lot of speculations over the next few months about how much Brazil will be able to export this year, after a massive record of 42.7 million metric tons in 2019, which put the country at the very top of the world’s corn exporters, surpassing the US (41.3 million metric tons) and Argentina (36.2 million).

Exporting corn now in 2020, however, will not be so easy because the competition will be fierce, with the US probably reassuming its spot as the number-one exporter, especially if the 2020/21 production reaches something like those 390 million metric tons preliminarily estimated at the USDA Outlook Forum.

Argentina will also be very competitive, with a production around 50 million metric tons (although still in doubt because of dryness in some areas) and about 19 million metric tons already sold to exporters and only waiting for the harvesters to do their work (3% of the area had been harvested until last week, according to the Buenos Aires Grains Exchange). And there is also Ukraine, of course.

Bumper soybean crop, despite the drought in the South
Last week, AgRural sent to its clients a new monthly revision to its soybean production forecast. The 2019/20 production is seen now at 124.3 million metric tons, 1.3 million down from February. The reduction was caused by hot, dry conditions in Rio Grande do Sul, Brazil’s southernmost state, normally the number three producer and the only state that has suffered a crop failure this season. Very good yields in other states, however, make up for part of the losses in the South.

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