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May 15, 2019

Brazilian Farmers Optimistic as Early Safrinha Corn Harvest Begins

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

A lot of the recent estimates of the 2018/19 Brazilian corn crop have been increased based on the potential corn yields. Corn producers in the municipality of Sorriso, Mato Grosso are expecting safrinha corn yields in the range of 115 to 120 sacks per hectare (106 to 111 bu/ac). The weather has been good for the most part especially in Mato Grosso and Goias, so it is entirely possible that the safrinha corn will outperform this year.

The USDA increased their Brazilian corn estimate 4 million tons to 100 million tons in last week's WASDE report. That was a very aggressive change for them. I am not quite there yet at 100 million tons, but if yields start coming in as good as some people are anticipating, a 100 million tons is doable. The weather for the safrinha corn has generally been good and farmers are very hopeful concerning their safrinha corn.

Mato Grosso - The Mato Grosso Institute of Agricultural Economics (Imea) reported that the rainfall from January through April in most of Mato Grosso has been greater than during the last three years, which is good news for the safrinha corn. Imea indicated last week that 30% of the safrinha corn in the state was in the process of maturing and that the first fields may be harvested as soon as this week. In the municipality of Lucas do Rio Verde, which is located in central Mato Grosso, farmers are expecting corn yields in the range of 105 to 110 sacks per hectare (97.0 to 101.6 bu/ac). The early corn harvest should start very soon and many farmers have already forward contracted much of their anticipated production.

Parana - The Department of Rural Economics for the state of Parana (Deral), indicated earlier last week that 1% of the safrinha corn in the state had been harvested and that 18% is maturing. The safrinha corn in Parana is rated 1% poor, 11% average, and 88% good. In western Parana, farmers are expecting their safrinha corn yields to be in the range of 130 to 140 sacks per hectare (120 to 130 bu/ac).

There are some problem areas in northern Parana that have been dry for 40 days. Farmers in these areas had been expecting safrinha corn yields in the range of 100 sacks per hectare (92.4 bu/ac), but the yields will now probably be closer to 80 sacks per hectare (74 bu/ac). Farmers in Parana had hoped for R$ 30 per sack for their corn (approximately $3.55 per bushel), but current prices are R$ 25 per sack (approximately $2.95 per bushel), which would be borderline profitable for farmers.

Goias - Rainfall during April and early May has helped the safrinha corn in the municipality of Jatai located in southwestern Goias. Farmers are expecting yields in the range of 110 sacks per hectare (101.6 bu/ac) and they have forward contracted approximately 40% of their anticipated production. Forward contracting was the wise choice this year due to the recent declines in domestic corn prices.

Mato Grosso do Sul - Safrinha corn yields in the municipality of Laguna Carapa, which is located in the southern part of the state, are expected to be about trend line, but farmers are worried about the low corn prices. Farmers had hoped to sell their corn in the range of R$ 30 to R$ 31 per sack (approximately $3.55 to $3.65 per bushel), but current prices are actually below R$ 20 per sack (approximately $2.35 per bushel).

Full-season corn - In the state of Parana, 97% of the full-season corn has been harvested. Nearly all the fill-season corn in Rio Grande do Sul has been harvested and most of the safrinha corn left to be harvested will be used for silage.

AgRural increased their estimate of the 2018/19 Brazilian corn crop to 99.2 million tons, which was an increase of 5.7 million tons from their April estimate. DATAGROW increased their 2018/19 Brazilian corn estimate 0.8 million tons to 94.9 million. Conab increased their corn estimate by 1.25 million tons to 95.2 million.

In their May report, WASDE increased their 2018/19 Brazilian corn estimate by 4.0 million tons to 100.0 million. Their first estimate of the 2019/20 Brazilian corn estimate is 101.0 million tons.