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December 23, 2016

Brazil's Second Crop of Corn could set New Record

The weather thus far this growing season in Brazil has been very encouraging for farmers planning on planting a second crop of corn following the harvest of their first crop of soybeans. The safrinha corn crop in Brazil is expected to set a new record high production in 2017 and account for approximately two-thirds of Brazil's total corn production.

Mato Grosso is the largest soybean and corn producing state in Brazil and all the soybeans in the state were planted very early this growing season. Ample soil moisture allowed farmers to start planting their soybeans on the first day allowed, which was September 15th. As a result, it is estimated that as much as 25% of Mato Grosso's soybeans will be harvested by the end of January, which would equate to 7 million tons of soybeans. Generally, about 10% of Mato Grosso's soybeans are harvested by the end of January.

The early soybean harvest will then allow for all the safrinha corn to be planted by the time the ideal planting window closes, which is about February 20th. During the 2015/16 growing season, approximately 40% of the safrinha corn in the state was planted after the window had closed. The late planting, coupled with an early end to the rainy season in early April, resulted in very disappointing safrinha corn yields in the state.

The Mato Grosso Institute of Agricultural Economics (Imea) is estimating that farmers in Mato Grosso will plant 4.42 million hectares of safrinha corn or 4.1% more than last year and all the corn should be planted by the end of February. Imea estimates that the safrinha corn yield in 2016/17 will be 94.4 sacks per hectare (87.2 bu/ac) or 27% more than drought plagued crop of last year and that the safrinha corn production in the state will be 25 million tons. Virtually all the corn produced in Mato Grosso is safrinha production.

The consulting firm AgRural released their first estimate of the 2016/17 safrinha corn crop last week and they anticipate that the safrinha corn acreage in Brazil at 11.1 million hectares (27.4 million acres) with a total safrinha production of 59.9 million tons, which would set a new record high production. Brazil's safrinha corn production in 2015/16 was 41.1 million tons and the prior record was 54.6 million tons set in 2014/15. AgRural is estimating the total 2016/17 Brazilian corn crop at 88.3 million tons.

Parana is the second leading safrinha corn producing state and AgRural is estimating that the safrinha corn acreage will increase 6%. The safrinha corn acreage in Goias is expected to increase 4%.

The increase in safrinha corn acreage is the result of firmer domestic corn prices resulting from a severe shortage of corn for most of 2016. The shortage of corn is now easing and as a result, domestic corn prices in Brazil are declining. While still relatively good, corn prices in northern Mato Grosso are expected to decline to $2.00 to $2.30 per bushel by the time the safrinha corn harvest gets underway next June.