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June 2, 2015

Early Safrinha Corn Harvest Underway in Brazil

Farmers in Mato Grosso and Parana have started to harvest their 2015 safrinha corn crop. The Mato Grosso Institute of Agricultural Economics (Imea) reports that 1% of the corn in the state has been harvested. Farmers are harvesting the earlier planted corn and harvest pace should accelerate in about 20 days as more of the corn dries down to the harvest moisture.

Imea is estimating that the state will produce 17.8 million tons of corn in 2014/15 which would be 0.45% more than in 2013/14 even though the safrinha corn acreage declined nearly 8% in 2014/15. Good rainfall throughout the growing season is expected to result in very good corn yields. Imea is estimating that the 2014/15 corn yield could surpass 100 sacks per hectare (6,000 kg/ha or 92.4 bu/ac). The Mato Grosso Soybean and Corn Producers Association (Aprosoja) is more optimistic and they estimate that the safrinha corn yield in the state could average as high as 110 sacks per hectare (6,600 kg/ha or 101.6 bu/ac).

In anticipation of a record large safrinha corn crop, domestic corn prices in Mato Grosso have declined 13% compared to two months ago and they are expected to decline even further as the harvest pace accelerates. Additional downward pressure should result from a lack of adequate storage space in the state since many grain facilities will be piling the corn outside.

Farmers in Mato Grosso, which is the largest corn producing state in Brazil, are hoping that the Brazilian government will step in with Pepro auctions to support the corn price similar to what was done last year. The funding for Pepro auctions may be in doubt this year since the government is desperately slashing budgets in an attempt to stem rising deficits.

In the state of Parana, which is the second leading safrinha corn producing state in Brazil, the Secretary of Agriculture in the state reported late last week that 2% of the safrinha corn in the state has been harvested. The weather has been beneficial in the state as well and corn yields are expected to be high.

This marks four years in a row that the rainy season has been extended in Brazil, which has greatly benefited the safrinha corn crop. Meteorologists in Brazil are crediting El Nino for the late season rains this year, but an El Nino was not in place for the three prior years when late season rains also occurred.