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July 10, 2013

Safrinha Corn now Accounts for 56% of Brazil's Total Corn Crop

In their latest assessment of the 2012/13 growing season, Conab increased their estimate of the Brazilian corn crop from 78.46 million tons to 79.07 million tons or an 8.4% increase over the previous year. The full-season corn production was left unchanged at 34.83 million tons, but the safrinha corn production was increased from 43.62 to 44.24 million tons. The way it stands now, the safrinha corn crop will account for 56% of Brazil's total corn crop.

Conab increased the nationwide safrinha corn yield to 4,943 kg/ha (76 bu/ac) from last month's 4,873 kg/ha (75 bu/ac). They accredited the improved yields to good late-season weather in Parana, which is the second leading safrinha corn producing state in Brazil. Mato Grosso is the leading safrinha corn producing state with 42% of the total production followed by Parana at 24%, Mato Grosso do Sul at 14%, and Goias at 8.5%.

The prospects of a record large safrinha corn crop continue to put pressure on corn prices in the state of Mato Grosso. Prices being paid in Mato Grosso are the lowest since September of 2010. According to the Mato Grosso Institute of Agricultural Economics (Imea), corn in Rio Verde, which is located in southeastern Mato Grosso, was selling last week for R$10.17 a sack of 60 kilograms, while in Sapezal in western Mato Grosso it was selling at R$ 10.50 a sack and in Tangara da Serra (also in western Mato Grosso) it was R$ 11.00 per sack. In addition to harvest pressure, Imea also credits the low prices to a potential large corn crop in the United States that have pressured international corn prices as well.

While farmers in Mato Grosso are disappointed with the corn prices, they are more pleased with the improving domestic cotton prices. Over the next few months, farmers in the state will harvest a much smaller cotton crop compared to last year. The smaller production is putting upward pressure on prices and a weaker Brazilian currency is helping to spur textile exports. The improved cotton prices may encourage farmers in Mato Grosso to increase their cotton acreage for the 2013/14 growing season.