Wednesday, May 8, 2013

2nd crop corn potentials

2013 Brazil Corn Expedition
Second crop 'safrinha' of 40.58 million raises total corn crop to 76.88 million t
With record production, Brazil awaits definitions on United States planting - which remains behind schedule - with the challenge of sustaining prices and shipments
Brazilian farmers placed their bets high and are about to retire from field activities after yet another record winter corn production of 40.58 million tonnes. This estimate is from the Brazil Corn Expedition, a project conceived by Agronegócio Gazeta do Povo, INTL FCStone consultancy and the Mato Grosso Institute of Agricultural Economics (Imea) who toured the five major producing states of the grain's second crop in recent weeks. The grain's harvest, which should begin next month, exceeds for the second year in a row the volume produced in the summer, making the term 'safrinha' (or the "little crop" in Portuguese) a thing of the past.  In the field, the winter harvest has earned a more appropriate nickname – ‘safrona’, meaning the "big crop".
During a 7,000 km trip through Mato Grosso, Paraná, Mato Grosso do Sul, Goiás and São Paulo technicians and journalists confirmed optimistic expectations for production. And it's no surprise. Following gains from last winter, farmers put into practice a recipe for high productivity. Soils were well fertilized and most used high-tech seeds. To top it off, the climate was almost as perfect as in 2012.
The few areas needing rain to reach yields equal to or higher than last year, found salvation. In Paraná - the second largest domestic producer of the crop - it rained last weekend in much of the dry areas. "I still have not confirmed with my father, but I think the rain was around 15 mm. It came at a good time. Now, we hope that the colder days won't cause us any damage", said agronomy student Pedro Versari, who works with his father David on a property of 600 hectares planted with winter corn. They believe they will be able to achieve the same average productivity as last year, equivalent to more than 82 bags per hectare.
On the other hand, the projected crop is a red flag for Brazil, which must confront the challenge of increasing its exports in a year of stable domestic consumption, the recovery of the largest global producers and suppliers (United States), and weak advanced sales. Sales of the winter grain continue at a pace 50% below the same time last year, the Corn Expedition found.
Altogether, Brazil will dump 76.88 million tonnes of corn into the market, considering summer (36.3 million/t) and winter production. With domestic demand at 52 million tonnes, the country is expected to end the year with more than 16 million tonnes in stock, the largest in history. To make matters worse, the delay in soybean shipments since the beginning of the year will also likely influence the market for the cereal.  "Corn will only likely begin to be shipped out of the country in August and September, which is very worrisome, because it will be at the same time that the United States is to begin its harvest," said Otávio Celidonio, superintendent of Imea.
The future scenario has already started coming true. According to a survey conducted by the consulting firm FCStone, "from February to January [the National Supply Company's crop year] exports in the 2012/13 crop accumulated 4.5 million tonnes, representing 30% of the 15 million estimated for the entire cycle." Last week, the performance of corn futures prices was marked by fears over delays in planting, which served as a factor of support, according to a weekly report from the consultancy.
The document emphasizes that the cold and wet weather in the United States' Corn Belt throughout the week complicated planting and reinforced expectations of greater potential to transfer area from ​​corn to soybeans if the delay persists. 80% of the crop is expected to be planted after May 15, demonstrating the record delay, the report shows.
Brazil Corn - Aside from Agronegócio Gazeta do Povo, FCStone and Imea, the Brazil Corn Expedition received support from Sicredi, Montana and Perfipar.

Luana Gomes
Jornalista/Analista de Agronegócio - Gazeta do PovoGRPCOM – Grupo Paranaense de Comunicação
41 3321.5366 | 41 9187.4305           
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