January 24, 2017

Early Safrinha Corn Planting in Brazil delayed by Wet Weather

Farmers in central Mato Grosso have harvested 11% of their soybeans and they have started to plant their safrinha corn. The Mato Grosso Institute of Agricultural Economics (Imea) had projected that 15% of the soybeans would have been harvested by now.

I would estimate that maybe 5% of the safrinha corn has been planted and a lot of that is just emerging. The most advanced corn is about 4 inches tall. Mato Grosso is wet and there is a lot of water standing in the fields and along the edges of the fields, so it is going to take a day or two of sun to get the planters rolling again. As a result, we saw planters parked along the side of the field. Unfortunately, the forecast is calling for more rain, but maybe not as much as last week.

All the corn in central Brazil is going to be safrinha production. If the weather turns a little dryer, they should be able to plant all the corn during the ideal planting window. The problem for the safrinha corn is going to be the price. There are already forecasts for the corn price in June to be in the range of R$ 13.00 to R$ 15.00 per sack or $1.85 to $2.15 per bushel. The minimum price set by the government is approximately R$ 18.00 per sack or approximately $2.55 per bushel.

If these price forecasts are correct, the government would need to buy a lot of corn from the farmers, but it is doubtful if the federal government will have the wherewithal to purchase much corn. Therefore, farmers are looking at a very low corn price and at this point, I do not expect the safrinha corn acreage to increase more than about 5%.