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October 4, 2011

Safrinha Corn Prod. In Brazil Almost Equal to Full-Season Prod.

Brazilian farmers are very enthusiastic about corn production in 2011/12 and the full-season corn acreage in southern Brazil is expected to increase nearly 10% while the safrinha corn acreage in central and southern Brazil is expected to increase 13%. The state of Minas Gerais will have the largest full-season corn acreage this year at 1.19 million hectares followed by Rio Grande do Sul at 1.12 million and third is Parana at 900,000 hectares. Nearly all of the corn produced in Mato Grosso (over 95%) is grown as a safrinha crop planted after the soybeans are harvested

The biggest change in Brazilian corn production though will be the safrinha acreage. In the central and southern regions of Brazil the farmers are expected to increase their safrinha corn acreage 13% to 6.0 million hectares. Mato Grosso will continue to have the largest safrinha corn acreage at 2.4 million hectares (up 29%) followed by Parana at 1.7 million hectares (up10%). safrinha corn production is becoming more and more important in Brazil and in fact, the 2011/12 safrinha production may almost be equal to the full-season corn production in southern Brazil. Later this week, Conab will issue their first monthly crop estimate for the 2011/12 growing season.

The fact that safrinha corn production continues to gain on full-season corn production comes as no surprise due to the advantages offered by this second crop of corn. Full-season corn production in southern Brazil competes with soybeans for the same acreage. Brazilian farmers prefer to grow soybeans, but they will switch some of their acreage to increased corn production if the price is right.

In contrast, safrinha corn production competes with wheat or other small grains in southern Brazil and Brazilian farmers really don't like to grow wheat due to low yields and unfavorable prices. If the weather cooperates, the farmers in northern Parana for example would much prefer to follow their soybeans with a second crop of corn instead of wheat.

The safrinha corn acreage in central Brazil really doesn't take away acreage from any other crop except for maybe some cotton, but the safrinha corn acreage in Mato Grosso for example is approximately 15 times larger than the safrinha cotton acreage.

The weather will be the final determining factor in how many hectares of safrinha corn eventually gets planted in Brazil, but Brazilian farmers took advantage of a weaker currency and they have already forward contracted as much as half of their anticipated safrinha corn production. Therefore, they already have money in their pockets to plant the corn and a commitment to produce it.