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April 16, 2014

After Delayed Start Brazil's Safrinha Corn in Good Condition\

Even though much of the safrinha corn was planted later than desired, the growing season thus far for the safrinha corn crop in Brazil has been very favorable. Virtually all the safrinha corn has now been planted and the weather continues to cooperate, resulting in good crop development. As of late last week, approximately 7% of the safrinha corn in Mato Grosso has already finished pollinating and 10% of the corn in Parana has also finished pollinating.

Low corn prices in Brazil late last year resulted in a reduction of 2.3% in the safrinha corn acreage in 2014 and the total estimated production is expected to be down 7.4% compared to last year. Even with the reduction, Conab is estimating that the safrinha corn crop will produce 43.9 million tons and the safrinha corn crop will account for 58% of Brazil's total corn production. The condition of the safrinha corn crop in Parana is rated 93% good, 6% average, and only 1% poor.

The safrinha corn in Mato Grosso will need adequate moisture throughout the month of May to insure adequate grain filling and the crop will be harvested in June and July. Generally the summer rains in Mato Grosso start to diminish in April, but thus far in April, there has been ample moisture for crop development. In the state of Parana, a potential problem for the crop is the possibility of cold weather during May or June. In 2013, a series of frosts negatively impacted the corn crop in the state. The safrinha corn in Parana will be harvested in July and August.

Thus far, farmers in Brazil have been relatively slow in forward contracting their anticipated safrinha corn production. Farmers are expecting corn prices to increase due to the reduced corn production in Brazil and the prospect for reduced corn acreage in the United States.

The full-season corn in Brazil is currently in the process of being harvested and most of the full-season corn is consumed domestically in Brazil by the livestock industry centered in southern Brazil. It is the safrinha corn that makes up the bulk of the corn exports from Brazil. The timing of the safrinha harvest allows for the corn to start being exported when soybean exports from Brazil are declining. The peak soybean export season is from April through July, whereas the peak corn export season is from August through November.