Corn production in Brazil’s second crop 2018/19 is expected to grow about 21% over the past year, driven both by an increase in area and by prospects for better yields, although uncertainties will affect the market after losses in the soyabean harvest. Brazil is expected to produce 65.3 million tons of corn of the second crop, against 53.9 million in the previous season, marked by adverse conditions in several regions, especially in Paraná, according to the average of nine consultant estimates and entities in the sector. This increase is driven, in part, by the 4.2% increase compared to 2017/18, according to the survey, which indicated a 12 million hectare plantation for the harvest that will be harvested in the middle of the year. It accounts for about two thirds of the national corn production. The expansion reflects the mood of the producer with prices. The corn indicator of Esalq / USP’s Center for Advanced Studies in Applied Economics (Cepea) is about 20% higher than that seen a year ago, at the rate of 41 reais per bag. In parallel, a window of planting so “ideal” had not been seen for some time. With the advance soyabean harvest, farmers are also advancing with the sowing of the cereal of safrinha, leaving the crops for more time exposed to the rainy season, which can guarantee them better yields. With planting in a more favorable season, productivity could reach 5.13 tons per hectare, up from 4.67 tons last year, according to Rabobank’s preliminary estimate, based on trend line. In Paraná, the state most affected by the dry season during last year’s off-season, conditions are better now. According to the Department of Rural Economy (Deral), more than 90% of the crops are in good stage, and the State tends to raise the harvest by 40%. In Mato Grosso, the largest Brazilian producer of the cereal, Imea expects its productivities to be around 3% higher, above 6 tons per hectare. The state is expected to produce almost 29 million tons of corn in the second crop 2019/19. Belasco, of the IEG FNP, added that thanks to the US dollar appreciated during the electoral race, the producer was able to anticipate the commercialization at remunerative prices, obtaining the necessary financing to afford the investments that can guarantee greater agricultural yields. Despite the favorable scenario, the market does not rule out risks to the second corn crop in Brazil. And the fear is basically about the climate, since the drought that damaged the soyabean leaves the producers afraid. In parallel, a new taxation in Mato Grosso also enrage the producers, with a bigger impact predicted in the sowing of 2020.
Source: Reuters