Brazil trims corn forecast over drought

Market: Agriculture, Fertilizers
09/06/20

Brazil's government today again cut its forecast for the 2019-20 winter corn crop to 74.2mn metric tonnes (t), which would still be a record and 1.4pc higher than the previous year, because of drought.

The latest forecast is down by 2.2pc from last month's estimate as a harsh drought has lowered yields in key producing regions.

Harvesting of the so-called safrinha crop is underway across the country. Acreage increased by 6.6pc from last season to a 13.7mn hectare record, partially offsetting the unfavorable weather impacts.

The southern state of Parana, typically the second-largest Brazilian corn producer, was the most hampered. Its safrinha production is poised to fall by 15.3pc to 11.4mn t, national agricultural statistics agency Conab said today. Mato Grosso do Sul and Sao Paulo are expected to see production fall by 9.7pc and 2.5pc, respectively.

The winter crop accounts for around three-quarters of Brazilian corn output. Considering the already-harvested summer crop, the country is on track to produce 101mn t in the 2019-20 cycle. That estimate is down from 102.3mn t last month but would still mark a 0.9pc increase from the pervious season, Conab said.

Productin in the now-complete soybean season is estimated at a record 120.4mn t, a record. That is virtually flat from May's estimate and 4.7pc higher compared with the 2018-19 season.

Conab estimates a 2.9mn t cotton lint harvest this cycle, stable month-on-month and up by 3.9pc compared with 2018-19. For wheat, it forecasts 5.7mn t, a 10.4pc increase from the last harvest year.

Brazil's total production of grains and oilseeds in 2019-20 is estimated to hit a record 250.5mn t. That compares with 242.1mn in 2018-19, according to Conab.

Supply and demand

Conab kept its estimate for Brazil's corn exports through 2019-20 at 34.5mn t, but given the lower safrinha harvest the forecast for the cereal ending stocks was reduced to 9.9mn t from around 11mn t last month. Ending stocks in the previous season were also 11mn t.

If accurate, the carryover inventories would be the lowest since 2015-16, when the country faced a drought-borne crop failure.

There were no changes for soybean and cotton lint export estimates at 77mn t and 1.7mn t, respectively.

By José Roberto Gomes

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