Brazil-Corn production down.
Brazil Corn Report: Production Down; Financial Crisis
Post forecasts 2008/09 total corn production of 49.5 million tons including a second crop (safrinha) production estimate of 16.5 million tons, down from last year’s 18.7 million tons. Safrinha planted area is projected to be down 4 percent from last season and yields are forecast to drop 6 percent due to lower input use.
Planting intentions for winter crop corn have been in flux. Months ago, analysts forecasted a 30-40 percent drop in planting due to the financial crisis and the high cost of inputs. More recently, Parana producers were expected to plant more winter corn to compensate for the losses of the drought-affected main crop corn. Now, improved local prices for wheat coupled with a pullback in local prices for corn have resulted in two big grain cooperatives in Parana state reporting that producers are planting wheat instead of safrinha corn.
In the Center-West region, the area most affected by the credit crunch due to its dependence on the barter system for financing, producers are expected to apply significantly less fertilizer. As a result, yields in Mato Grosso, the top safrinha corn-producing state, could fall by as much as 11 percent.
About 20 percent of the expected area has been planted already, well ahead of last year when at this time only 13 percent had been planted. Soil moisture conditions in Mato Grosso and Parana are reported to be good. Mato Grosso has planted around 20 percent of expected safrinha area and production is seen at around 6.2 million tons, compared to 7 million tons last season. In Parana, the country’s second largest winter corn producer planting is around 40 percent complete with weather conditions mostly favorable. The safrinha corn crop is expected to remain relatively stable at 5.6 million tons.
Winter crop yields fluctuate greatly as precipitation is unpredictable during the planting season. Although, there is some concern regarding a new episode of La Nina and its affect on the crop, experts predict that La Nina will have a weak intensity and a short duration.
For the 2009/10 marketing year (March 2009/February 2010) post forecasts corn acreage to marginally shift by 2 percent to 14 million hectares as producers switch acreage from corn to soy. Producers opt for soy based on soy’s lower input costs and greater liquidity in a tight credit environment. Yields, however, are expected to recover.
First crop 2008/09 corn is already almost 30 percent harvested, a faster pace than for last year’s crop that was delayed by dry weather at planting time. Dry conditions in key growing regions severely impacted yields of first crop corn reducing its 2008/09 first crop corn production to 33 million tons well below 2007/08’s production of almost 40 million tons.
