By Daniele Siqueira
I’m here again to bring you a new update on Brazilian soybean and corn crops. In a normal year, about 20% of Brazil’s soybean area would be harvested by now. This year, less than half of that is harvested so far, because the crop was planted later than normal (it was too dry in September and October) and also because overcast skies and constant rains in the second half of January slowed down the crop development.
The delayed crop, combined with virtually non-existent beginning stocks, has had an impact on Brazilian supply and exports, as I warned here months ago. In January, Brazil exported only 49.5 thousand metric tons of soybeans — the weakest result for the month in seven years. In January 2020, shipments reached 1.4 million metric tons.
In February, the vessel lineup shows that 9 million metric tons of soybeans could be shipped by the end of the month. Although a big surge in the harvest pace is expected in the second half of February, a significant part of those shipments amount will have to be rolled over to March. This is good for U.S. exporters.
Nevertheless, Brazil is headed to another record soybean crop. Despite all the problems at the beginning of the season and some yield losses caused by the lack of moisture in late 2020, production is likely to reach something between 133 million and 135 million metric tons, if everything goes smoothly in states where weather conditions still pay a role until mid-March.
But what about corn?
I said I would talk about corn, right? Sorry, but it’s really hard to write about Brazilian corn without a soybean introduction. The first corn crop, which competes for area with soybeans, accounts for about 25% of total production and is harvested from January to May. It has failed in two southern states (Rio Grande do Sul and Santa Catarina), but is in good shape elsewhere.
The second corn crop, which accounts for 75% of total production and for virtually all Brazilian exports, is planted from January to March, right after the soybean harvest, on the same areas, and enters the market from June onwards — in a normal year, which is not the case now in 2021.
Because of the soybean delay, our 2021 “safrinha” corn plantings are lagging behind, and a significant part of the area will be planted after the ideal window, which closes between mid-February and mid-March, depending on the region.
By Feb 11, only 11% of the second corn crop area had been planted in south-central Brazil — just a third of what had been sown a year ago, according to AgRural. Planting soybeans later than normal in Brazil is not exactly a problem for yields — sometimes, it is quite the opposite. For “safrinha” corn, however, things are different.
Traditionally a risky crop, the second corn has to be planted as early as possible in the year, because that gives the crop time to pollinate and fill grains before rains get too scarce (late fall and winter are particularly dry in central Brazil). Another problem is that freezing temperatures are not uncommon in southern areas.
Farmers, however, are likely to increase the second corn crop area by about 5% this year, spurred by strong prices (in Brazil, corn is above $6 per bushel since November) and forward sales. With that kind of increase, and if Brazil is lucky enough to receive above-normal rains between April and July, the second crop production will hit something around 80 million metric tons, putting total corn production at 105 million metric tons, versus 102 million last year.
Even if the second crop doesn’t fail, we’ll see a lot of rumors and speculations around the weather conditions, with an impact on Brazilian prices and probably on the market in Chicago. Brazilian exports, which normally start to pick up in July, will also be delayed this year, possibly making room for more exports from the U.S. and Argentina.