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December 16, 2020

2020/21 Brazil Full-Season Corn Impacted by Dry Weather

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Even though southern Brazil did receive rain over the last several weeks, it came too late for the earlier planted full-season corn, which suffered significant yield losses. There are also concerns if Brazilian farmers will plant as much safrinha corn as anticipated. Some farmers have already indicated that they will be forced to plant their safrinha corn in March when there is a higher risk of lower yields. If the rainy season is extended into late May or early June, the late planted corn should be OK. If it looks like the rains will end early, then farmers may not want to risk planting their corn later than normal.

Parana Full-Season Corn - The Department of Rural Economics (Deral) reported that the full-season corn in Parana was 50% in vegetative development, 33% pollinating, 16% filling grain, and 1% maturing. The corn was rated 5% poor, 18% fair, and 77% good. The percentage of the crop rated good is up 2% from last week.

Rio Grande do Sul Full-Season Corn - Emater reported that farmers in the state had planted 87% of their 2020/21 full-season corn as of late last week compared to 90% last year and 94% average. This represented an advance of 2% for the week. The corn was 36% germinating or in vegetative development, 27% pollinating, 28% filling grain, and 1% maturing.

According to the Farsul System, the full-season corn crop in Rio Grande do Sul suffered from drought for the second year in a row. They are estimating the 2020/21 corn production in the state at 3 million tons, which would be a reduction of 28% compared to last year and a reduction of 47% compared to 2018/19.

Santa Catarina Full-Season Corn - The Agricultural and Livestock Federation of Santa Catarina (FAESC) estimates that the full-season corn yields in the state will be down 35% due to the dry weather. The silage corn was also severely impacted, but dairy farmers are expected to replant some of their silage corn. The livestock sector is very worried because the state will need to import approximately 5 million tons of corn from other Brazilian states as well as from Paraguay, Argentina, maybe even the United States.

Mato Grosso Safrinha Corn - The technical director for Imea feels that if the soybean harvest progresses quickly without any major weather delays, the majority of the safrinha corn could still be planted before the end of February, which would still be within the ideal planting window. If the safrinha corn planting is delayed until sometime in March, farmers will have to determine if the risks outweigh the benefits of a late-planted safrinha corn crop.

The plant-or-not-plant decision has already been made by many farmers who have already purchased the inputs for their safrinha corn and forward contracted much of their anticipated production. In that situation, farmers will continue planting their safrinha corn into March with the hope that the delayed start to the summer rains may also mean a delayed end to the rains as well.

The Mato Grosso Institute of Agricultural Economics (Imea) reported that farmers in the state have forward contracted 62.6% of their anticipated 2020/21 safrinha corn production. The average price for the 2020/21 corn during the month of November was R$ 43.50 per sack (approximately $3.70 per bushel). Farmers have also forward contracted 6.6% of their 2021/22 safrinha corn that won't be planted for another 13-14 months. The average price for the 2021/22 safrinha corn during November was R$ 39.95 per sack (approximately 3.45 per bushel).