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Lack of rain puts Brazil corn crop at risk

Soy planting delays will mean a very tight window to plant ‘second corn’

Reuters – Delays in Brazil’s soybean planting due to scarce rainfall may affect sowing of the country’s second corn crop, which is planted after the oilseed is harvested and represents about 73 per cent of the South American output.

“There is a lot of risk for the (corn) crop,” Antonio Galvan, head of the Mato Grosso state grain growers’ association, said in a telephone interview with Reuters Oct. 1. Only if rains last through the end of April, can Brazil have a good second corn crop, he said.

According to agribusiness consultancy Arc Mercosul, soybean planting is at 46.9 per cent of the expected area for the 2019-20 season, way below the 61.6 per cent level seen at this time last year and lower than the 49.2 per cent five-year average.

Last season Mato Grosso harvested a record corn crop of 32.3 million tonnes, as farmers were able to plant within the ideal window, thanks to abundant rainfall, Galvan said.

Brazil, the world’s second-largest corn exporter after the United States, collected some 100 million tonnes of the cereal in 2018-19.

While the threat of collecting a smaller corn crop is real due to the weather, higher internal prices and demand in export markets remain strong, meaning farmers will plant the cereal anyway, Galvan said.

A factor affecting planting intentions includes the situation in the United States, the world’s largest producer of corn, where farmers are facing adverse climate conditions, he noted.

According to government export agency Secex, Brazil’s corn exports in October were 6.14 million tonnes, almost double the same month a year ago.

Anec, the exporters’ association, estimates Brazilian corn exports at 35 million tonnes this year, the highest level in history. On Friday, Anec told Reuters that the forecast will be revised due to the strong pace of Brazil’s corn exports in recent weeks.

The price of corn in the Brazilian market increased 8.5 per cent last month, according to data from the Center for Advanced Studies in Applied Economics (Cepea).

Brazil is expected to ship about 4.1 million tonnes of soybeans in November, and 3.3 million tonnes of corn this month, according to fresh estimates by exporter group Anec.

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