April 11, 2012

Safrinha Corn is Bright Spot in Otherwise Disappointing Report

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

In Conab's April crop estimates, the only bright spot was the estimate for the 2011/12 safrinha corn production. Conab confirmed once again that the 2011/12 drought in southern Brazil took a heavy toll on the full-season corn crop, the soybean crop, and the rice crop in Rio Grande do Sul.

Conab estimated that the safrinha corn crop production could be as high as 29 million tons, and if that estimate turns out to be true, the safrinha crop would represent approximately 45% of Brazil's total 2011/12 corn crop. They estimated that the safrinha acreage will increase 20% nationwide with a nearly 40% increase in the state of Mato Grosso. The nationwide safrinha corn yield is estimated at 4,104 kg/ha (63 bu/ac), which would be 12.5% greater than last year.

The most advanced safrinha corn is filling grain and the most delayed safrinha corn is still early in its vegetative development. The eventual safrinha production will be determined by when the rainy season ends. If the rains end during the month of April, the corn could undergo moisture stress resulting in disappointing yields. If the rainy season is extended until late May or even early June, then the safrinha corn yields should end up being very good.

While the prospects for the safrinha corn crop look good, the results for the Brazilian soybean crop are just the opposite. Conab lowered its estimate of the Brazilian soybean crop by three million tons to 65.6 million, which is nearly 10 million tons less than last year or a decline of 12.9%. The lower production was the result of disappointing yields across much of Brazil, but especially in southern Brazil.

The soybean yields in Rio Grande do Sul, which is the third leading soybean producing state in Brazil, are now expected to be 45% lower than last year. The yields in Parana, which is the second leading soybean producing state, are down 33.5% compared to last year. Even in the state of Mato Grosso, which is the largest producing state, soybean yields are expected to be down 2.2% due to mainly increased pressure from soybean rust. The nationwide average soybean yield is now estimated at 2,624 kg/ha (38.3 bu/ac) compared to the 2010/11 yield of 3,115 kg/ha (45.1 bu/ac), or a decline of 15.8%.

Rice production in southern Brazil also ended up being disappointing with acreage down 11.7%, yields down 2.9% and total production estimated at 11.66 million tons, or down 14.3% compared to the 13.6 million tons produced in 2010/11. The main problem with the rice production was a shortage of water in the reservoirs used for irrigation.