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August 3, 2016

Early Corn Planting Underway in Rio Grande do Sul

It is only the first week of August and farmers in the state of Rio Grande do Sul in far southern Brazil are already starting to plant their 2016/17 corn crop. After planting the fewest corn acres in history in 2015/16, farmers are expected to increase their corn acreage by 20% in 2016/17.

Farmers are anxious to get started on their corn planting for two reason. The first and most important reason is the fact that domestic corn prices in Brazil have doubled over the past year. An extremely disappointing safrinha corn harvest has left Brazil with very tight corn supplies. So tight in fact, that it is expected that Brazil will have to import corn for the second year in a row.

Most of the imported corn would come from Argentina and Paraguay, but Reuters reported yesterday that the Brazilian Minister of Agriculture is working on ways to adjust regulations that would allow more GMO corn from the United States to enter Brazil.

In the state of Sao Paulo, corn prices increased 17% during the month of July as the extent of the safrinha corn loses became more apparent. The Center for Advanced Studies in Applied Economics (CEPEA) reported earlier this week that corn prices in the state of Sao Paulo hit R$ 48.21 late last week or approximately $6.65 per bushel.

The second reason for the early start to corn planting is because it will allow for a second crop of soybeans to be planted after the corn is harvested. Corn planted in early August will be ready for harvest by the end of December, which would allow farmers to immediately plant a second crop of soybeans.

This is a new type of cropping sequence has started just within the last several years. The Corn Producers Association of Rio Grande do Sul (Apromilho) estimates that as much as 200,000 hectares of soybeans will be planted after the first crop of corn is harvested. Farmers in Rio Grande do Sul are allowed to plant soybeans after the first of the year, whereas in Mato Grosso, no soybeans will allowed to be planted after December 31st.

In Mato Grosso scientists argue that planting a second crop of soybeans allows soybean rust spores to survive from one growing season to another. That is not as much of a concern in Rio Grande do Sul because cold weather during the winter season usually kills any surviving rust spores.