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January 15, 2016

Imea Lowers Safrinha Corn Estimate for Mato Grosso

In their fourth estimate of the 2015/16 corn crop in the state, the Mato Grosso Institute of Agricultural Economics (Imea) has reduced their estimate of the safrinha corn crop. The planting of the safrinha corn is expected to get started next week and Imea estimates that 3.38 million hectares will be planted in 2015/16, which would represent a 2% increase compared to the 3.30 million hectares planted in 2014/15.

The corn is expected to be planted later than normal due to the delayed planting and harvesting of the soybean crop. The delayed planting, in conjunction with reduced fertilizer applications and unstable weather, has led Imea to reduce their estimated average yield for the safrinha corn. Imea is now estimating the safrinha corn yield at 95.5 sacks per hectare (5,730 kg/ha or 88.2 bu/ac), which would be -10.6% compared to the yield in 2014/15 of 106.9 sacks per hectare (6,414 kg/ha or 98.7 bu/ac).

As a result, Imea is now estimating the total 2015/16 safrinha corn production in the state at 19.36 million tons or -8.7% compared to the 21.2 million tons produced in 2014/15. If realized, the 2015/16 corn crop in the state would be down 1.8 million tons compared to last year, but still be the third largest corn crop in the state's history.

El Nino has started to weaken, but meteorologists in Brazil still feel it will have an impact on the weather in central Brazil through most of the development of the safrinha corn crop. They are predicting that the rainy season in central Brazil will end at about the normal time (late April or early May) this year instead of being extended like it has been for the last four years. If that happens, the safrinha corn yields and production could decline even further.

The ideal planting window for safrinha corn in the state closes about February 20th, but plating can be extended until early March if necessary. The crop will start to be harvested in early June, reach 50% harvested by mid-July with the harvest complete by mid-August.

Farmers in Mato Grosso have already forward contracted 55% of their anticipated corn production compared to 22% last year at this time and 14% for the 5-year average. The average price of those contracts was R$ 18.24 per sack which should cover their costs and result in a small profit.