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May 3, 2016

Brazil's Safrinha Corn Impacted by Adverse Weather

The 2015/16 safrinha corn crop in Brazil got a brief reprieve last week from the hot and dry weather that has been impacting the crop for the last month and a half. A strong cold front swept into Brazil from Argentina last week bringing with it some precipitation and cooler temperatures. Most of the safrinha corn only received light amounts of precipitation and certainly not enough to end the prolonged drought. The cooler temperatures are beneficial, but unfortunately, the cold front also ushered in dryer air and now the forecast is for a dryer pattern to reestablish itself at least for this week with additional chances of rain next week.

The showers were welcomed of course, but after weeks of hot and dry weather, most of these showers barley "settled the dust." Much more rain would be needed in May to prevent even further deterioration of the safrinha corn.

There are many reports coming in from across Brazil indicating that the safrinha corn crop could be below expectations due to the adverse weather. AGR Brazil lowered their safrinha corn estimate last week to 52.1 million tons, which is 5.5 million below their March estimate. The firm Franca Junior lowered their estimate of the Brazilian corn crop to 79.6 million tons, which is down 7.6 million from their March estimate. Conab is currently estimating the safrinha corn crop at 57.13 million tons and the total Brazilian corn crop at 84.65 million tons.

The Agricultural and Livestock Federation of Goias (Faeg) estimated last week that the safrinha corn crop in the state would be down 40% to 50% with the hardest hit areas down as much as 80%. Farmers are asking their local governments to decree a state of emergency as a way to help them bargain with the grain companies because they will not have enough corn to fulfill their forward contracts.

The Department of Rural Economics for the state of Parana (Deral) recently estimated that the safrinha corn yields in the state would be down 6% from initial expectations due to hot and dry weather in northern Parana during the month of April. Deral now estimates the statewide safrinha corn yield at 93.7 sacks/hectare (86.5 bu/ac) compared to 97.8 sacks/hectare (90.3 bu/ac) estimated in March and below the 100 sacks/hectare (92.4 bu/ac) achieved last year.

Mato Grosso is the largest safrinha corn producing state and most of the safrinha corn in the state will be about average or slightly below average. The corn that will be impacted the most will be the later planted corn and the corn in the southern and eastern part of the state where the rainfall has been the lightest.

Reports from the city of Campo Verde, which is located in the southeastern part of the state, are typical. Last week, the region received about 0.2 inches of precipitation, which was the first rain in over a month. Farmers in the region who had expected to harvest 96 sacks/ha (88.7 bu/ac) of corn at the start of the growing season, are now hoping for 85 sacks/ha (78.5 bu/ac), but even that would only be possible with additional rainfall during May. As a comparison, a typical yield last year was 100 sack/ha (92.4 bu/ac) and two years ago it was 120 sacks/ha (110.8 bu/ac). The early safrinha corn harvest in Mato Grosso will start at the end of May.

The cold front did result in lower temperatures last week, which are beneficial. In southeastern Mato Grosso, the lows dropped down to 50°F (10°C) with the high in the mid-80s, which was much better than the 95-100°F they experienced for most of April.

Below are Conab's estimates for the Brazilian corn crop from their April Report. These estimates are adjusted once a month and I expect Conab to lower their corn estimates in their May report, which will be issued on May 10th.

2015/16 Brazilian Corn Production - Conab April Report

  AcreageYieldProduction
  million hectareskilograms/hectaremillion metric tons
Full-Season Corn2014/156.144,89830.08
 2015/165.57 (-9.2%)4,934 (+0.8%)27.52 (-8.5%)
Safrinha Corn2014/159.555,71654.59
 2015/169.90 (+3.7%)5,770 (+0.9%)57.13 (+4.7%)
Total Corn2014/1515.695,39684.67
 2015/1615.48 (-1.4%)5,469 (+1.4%)84.65 (0%)