April 20, 2016

2015/16 Brazil Corn Estimate Lowered 1.0 mt to 82.0 Million

There is growing concern in Brazil about the dry weather in central Brazil and the potential impact on the safrinha corn crop. The hardest hit areas are generally the states of Goias, Minas Gerais, Sao Paulo, and Mato Grosso do Sul. In this area, some farmers are approaching 40 days without rain. There are also concerns about the dry pattern in parts of eastern Mato Grosso and northern Parana.

The forecast is calling for continued hot and dry conditions in central Brazil for this week with chances of scattered showers later next week, but even then, the showers are expected to be light. The 10-day forecast for Rio Verde in southern Goias is for temperatures in the low to mid 90°F with the first chance of rain at the end of the 10-day period. If that forecast turns out to be true, some areas would go about 50 days without rain.

The safrinha corn crop is not in dire trouble everywhere. The safrinha corn is doing fine in most of Mato Grosso and in Parana. I would estimate that approximately 40% of the safrinha corn is in various levels of moisture deficits. If this weather pattern persists, it would not be a disaster for the safrinha corn crop, but it would certainly reduce the yields especially of the later planted corn.

Therefore, the 2015/16 Brazilian corn estimate was lowered 1.0 million tons this week to 82.0 million and I have a lower bias going forward. It looks to me like it is going to be an early end to the rainy season this year in central Brazil, but we won't know for sure for several more weeks. In a worst case scenario, there could still be maybe another 4 million tons of safrinha corn at risk due to the dry weather.

Below is Conab's current estimate for the safrinha corn crop and they are expecting a crop of 57.13 million tons of corn or 4.7% more than last year. I think that is too optimistic and I would estimate the crop at 55 million tons with the possibility that it could fall to as low as 51 million tons.

2015/16 Brazilian Corn Production - Conab April Report

 million hectareskilograms/hectaremillion metric tons
Full-Season Corn2014/156.144,89830.08
 2015/165.57 (-9.2%)4,934 (+0.8%)27.52 (-8.5%)
Safrinha Corn 2014/159.555,71654.59
 2015/169.90 (+3.7%) 5,770 (+0.9%) 57.13 (+4.7%)
Total Corn2014/1515.695,39684.67
 2015/1615.48 (-1.4%)5,469 (+1.4%) 84.65 (0%)