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September 16, 2016

Early Corn Planting Progressing in Southern Brazil

Farmers in the state of Parana in southern Brazil are taking advantage of the good planting conditions to accelerate the planting of their 2016/17 full-season corn crop. According to the Department of Rural Economics (Deral), farmers in the state have planted 19% of their intended full-season corn acreage. According to Emater, farmers in Rio Grande do Sul have planted approximately 30% of their 2016/17 full-season corn.

Deral is expecting farmers in the state to increase their full-season corn acreage for the first time in many years. The full-season corn acreage in Parana is estimated at 485,000 hectares or up 16% (70,000 hectares) compared to last year. As a comparison, farmers in Parana planted 2.196 million hectares of safrinha corn in 2015/16 or 84% of the total corn acres in the state. The full-season corn acreage in 2015/16 only represented 16% of the total corn acreage in the state.

The trend for the past decade has been to plant less full-season corn and to replace the corn with more first-crop soybeans. Farmers then followed up with more safrinha corn planted after the soybeans are harvested.

The increased full-season corn acreage is coming at the expense of soybeans and it is due to the improved domestic price of corn. Deral estimates that if corn yields surpass 100 sacks per hectare (154 bu/ac), then corn is more profitable than soybeans at the current prices. Corn prices in the state now average R$ 34.67 per sack (approximately $4.77 per bushel using an exchange rate of 3.3 Brazilian reals per dollar), which is 60% higher than last year at this time. Farmers have forward contracted approximately 5% of their anticipated full-season corn production.

While corn prices are relatively good, the cost of producing the corn has also increased. Deral estimates that it will cost R$ 21.00 per sack to produce the 2016/17 full-season corn in Parana compared to R$ 18.00 per sack last year.

Farmers in Parana have harvest 98% of their 2015/16 safrinha corn crop and they have sold approximately 60% pf their corn.