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December 10, 2019

Brazil May need to Import Corn before Safrinha Harvest next June

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

The weather in Brazil has generally been favorable for the full-season corn. Much of the corn is in vegetative development with the earliest corn already done pollinating and starting to fill grain.

Full-season corn in Rio Grande do Sul - The state of Rio Grande do Sul will be the largest producer of full-season corn in Brazil this growing season. Emater reported last week that farmers in Rio Grande do Sul had planted 88% of the full-season corn compared to 91% last year. The corn is 50% in vegetative development, 22% is pollinating, and 28% is filling grain.

Full-season corn in Parana - The Department of Rural Economics in the state of Parana (Deral) reported that farmers in the state have planted 100% of their corn and that the crop is 55% in vegetative development, 34% pollinating, and 11% filling grain. The corn is rated 0% poor, 9% average, and 91% good.

Potential corn shortages in Brazil - In addition to monitoring the weather and the progress of the full-season corn, a hot topic in Brazil is the possibility of very tight corn supplies between now and next June when they start to harvest the safrinha corn. The problem is that they are exporting corn too fast due to the devalued Brazilian currency.

The result is going to be very tight supplies of corn resulting in higher domestic prices and domestic users are concerned there could be a bidding war for available supplies. There is also the distinct possibility that Brazil will have to import corn from Paraguay and/or Argentina to fill the gap until they start harvesting the safrinha corn. Meat exports are increasing in Brazil and livestock producers have been warned about tight supplies and higher corn prices and that they should take action now to insure their corn supply for animal rations.

Domestic corn prices in Brazil continue to be strong. In Mato Grosso, which is the number one corn producing state in Brazil, corn prices last week averaged R$ 29.78 per sack or approximately $3.30 per bushel. All the corn in Mato Grosso is safrinha production and the breakeven price for safrinha corn production in the state is in the range of $2.00 to $2.25 per bushel depending on yields. These are very attractive corn prices in Mato Grosso and they could encourage farmers to plant as much safrinha corn as possible, if the weather permits. Corn prices in other states are even better than in Mato Grosso.