Ripening corn Mailson Pignata/ThinkstockPhotos

Brazil’s big corn crop will make you nervous

South Americans prosper from good weather but how will big yields impact world corn prices?

Due to good weather, Brazil has upped its estimate of second-crop corn production to 65.5 million tonnes, up 2.1 million from last month’s estimate. And for U.S. producers, that can only mean poorer world corn prices.

The July estimate is up 3.3% from the Brazilian government’s June estimate.

The production guess is up 61% over last year-- a weather season Brazilian producers would rather forget—with 3.2 million more acres of second-crop corn planted than last time around.

What the data reveals

The estimate by Conab—an agency of Brazil’s Ag Ministry—indicates little change in projected planted area, at 373,000 acres above last month’s estimate, mostly in Mato Grosso and Parana states. But it does count on a serious yield increase due to continued rains in May and June of 2017, with Mato Grosso producers said to get 94.8 bushels per acre on average, versus the less optimistic June forecast of 89¾ bushels in the June estimate.

That would produce a Mato Grosso record of 26.56 million tonnes of second-crop corn this season.

Meanwhile, the number-two second-crop corn state of Parana is slated by Brazilian officials to come in at 13.66 million tonnes of second-crop corn, given projected yields of 90.8 bushels per acre, up from the June estimate of 89¾ bushels per acre in June. At any rate, that’s up more than 76% compared to the last doleful season.

Fast harvest

Either way, Conab says Brazil’s nation second-crop corn harvest is racing along, with nearly 30% in the bin by the first of the month, of 1.8 million acres done, though the harvested corn is pegging more discounts in the North and Northeast of the country. Meanwhile, Brazil’s South is ahead of schedule in most places, with harvest advanced nearly nine percent over last year’s rate.

Regional differences

Even given the advance in Brazilian second-crop corn overall, the quality and ease of the crop is not the same everywhere you go. In my state of Minas Gerais, for example, producers saw a yield drop to 81.6 bushels per acres (versus last year’s 83¾ bushels last season, due chiefly to heavy spittlebug infestations.

Given the current good weather for second-crop corn, the Brazilian administration sets total 2016-17 corn production, over two crops, at a record 96 million tonnes, up nine percent from last time around. That’s more than 44% over the last (disappointing) year.

The opinions of the author are not necessarily those of Farm Futures or Penton Agriculture.

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