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Dry weather forecast intensifies corn yield concerns

The dry weather forecast for the next few days has further fueled the uncertainty over second crop production in Brazil, keeping prices high in most regions of the country.

Little rain is expected in the southern and Midwest region during April 5-12, according to the latest forecast by Brazil’s National Institute of Meteorology, or INMET.

Both southern and Midwestern states are major growers of corn in Brazil.

In Midwest, only the north and west parts of Mato Grosso are expected to receive good rains, with precipitation up to 80 mm, INMET forecast said.

Dry weather across central and southern parts of the second corn belt further increased dryness concerns, stressing early growth of the crop, Maxar said in its weather report.

“Rain this week [April 5-12] should be limited to Mato Grosso and Goias, which will favor northern portions of the safrinha corn belt, but dry weather will maintain dryness concerns in Mato Grosso do Sul, Sao Paulo, and Parana. Below normal rainfall should continue next week,” Maxar said.

The second corn planting in Brazil, which accounts for the bulk of the country’s output, was delayed this year, exposing the crops to weather risks.

Second corn planting in the nine states, which account for nearly 92% of the cultivated area, was complete in 98.1% of the total forecast area as of April 3, national agricultural agency Companhia Nacional de Abastecimento, or Conab, said in its weekly crop progress report.

The expectation of higher prices among producers remains due to the lower availability of corn and uncertainties about the climate during the development period of the second corn crop, Brazil-based Centro de Estudos Avançados em Economia Aplicada said in a note.

Corn prices are touching fresh highs in some of the key corn-producing states in Brazil.

During March 29 – April 2, the average price producers in Lucas do Rio Verde, Mato Grosso, received for 60 kg bag of corn was at Real 71.43, up 0.4% from the previous week and 74.65% higher year-on-year, Conab data showed.

In Londrina, Parana, producers received an average of Real 83.88/60kg for corn during March 29 – April 2, which was up 4.3% from the previous week and 96% higher than the previous season around the same time, Conab data showed.

With local corn supply dwindling corn exports have also dropped.

Brazilian exported 294,495 mt of corn in March, down nearly 38% year-on-year, data released by the Ministry of Development, Industry and Foreign Trade showed.

What next

The late planting of the second corn crop in Brazil has considerably increased the area of crops planted outside the ideal window this season.

The result of the second corn harvest will depend heavily on the climate in the second half of April and in May — the critical phases for corn productivity.

Currently, crops have adequate humidity in Goias and part of Mato Grosso, but the forecast of dry weather for the next two weeks worries growers in the rest of Center-South Brazil, Brazil-based consultancy AgRural said.

The ideal scenario for the second corn crop in Brazil will be above normal rains throughout April and May so that there are no significant productivity losses, according to AgRural.
Source: Platts

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