Linked In
News In
Linked In

You are viewing 1 of your 2 complimentary articles.

Register now to receive full access.

Already registered?

Login | Join us now

Soy appeal drives Brazil's first-crop corn sowings to lowest in years

Twitter Linkedin

Brazil's corn production will drop by nearly 5m tonnes, thanks to a drop in first-crop sowings to their weakest in at least 13 years, as low returns from the grain drive growers to plant soybeans instead.

Conab, the official Brazilian crop bureau, in its first forecasts for domestic row crop harvests in 2017-18, pegged corn output at 92.9m tonnes, down from last season's 97.71m-tonne.

The estimate reflected an expectation of a first crop harvest of at best 26.02m tonnes and potentially as low as 25.02m tonnes, which would be lowest on data going back to 2005.

The forecast reflected expectations of a further drop in sowings, seen decline by at least 336,000 hectares year on year to 4.93m-5.15m hectares.

Even at the top end of the range, that would represent the lowest since at least 2004.

'Low prices'

Conab said that its forecast for a reduction in area reflected in part an expectation of a continuation of a switch by Brazilian growers away from first-crop corn, of which sowings topped 9.6m hectares a decade ago.

Brazil corn estimates, 2017-18 and (2016-17 result)

First-crop area: 4.93m-5.246m hectares, (5.843m hectares)

First-crop yield: 5.07 tonnes per hectare, (5.556 tonnes per hectare)

First-crop production: 25.025m-26.433m tonnes, (30.462m tonnes)

Total corn production: 92.90m tonnes, (97.712m tonnes)

Source: Conab

"Farmers fear new infestations of cigarrinha [spittlebugs], which caused significant losses in the previous harvest," Conab said.

Furthermore, recent drought years in Minas Gerais – better known for their impact on coffee output – and had prompted farmers to switch other crops, with ongoing dryness further south in Santa Catarina slowing sowings.

'Better profitability'

Soybeans had been the main beneficiary of the quest for alternative crops, Conab said, pegging sowings of the oilseed for 2017-18 at 34.47m-35.21m hectares – a rise of at least 555,000 hectares year on year.

Brazil corn estimates, 2017-18 and (2016-17 result)

Area: 34.466m-35.208m hectares, (33.909m hectares)

Yield: 3.075 tonnes per hectare, (3.364 tonnes per hectare)

Production: 106.008m-108.258m tonnes, (114.075m tonnes)

Source: Conab

Nonetheless, Brazilian soybean production in 2017-18 was pegged at 106.01m-108.26m tonnes, down from 114.08m tonnes the year before, on ideas of yields retreating from last year's elevated levels.

The figure is in line with a 107.0m-tonne forecast from the US Department of Agriculture, and a 108.0m-tonne estimate from the International Grains Council.

However, it is shy of some projections from local analysts, with AgRural putting the crop at 109.9m tonnes, Franca Junior at 11.47m tonnes and Safras e Mercado at 114.7m tonnes.

Corn comparisons

On corn, the Conab forecast for overall production compares with a USDA figure of 95.0m tonnes, and IGC forecast of 90.2m tonnes.

However, direct comparisons are difficult to make at this stage, with Conab methodology meaning that its sticks, at this stage of the season, with a forecast for the next safrinha corn harvest in line with the last one.

By Mike Verdin

Twitter Linkedin
Related Stories

Evening markets: South American double whammy brings ags back down to earth

Ags lose early gains, undermined by a tumble in Brazil’s real, and falling rain in Argentina. Still, wheat futures remain in positive territory

Wheat leads respectable week for US crop exports

Sales of hard wheat - spring and winter - prove particularly strong. Cotton export data return to type - ie with strong sales but...

Can cotton prices extend their rally?

History suggests futures will not stay long in the 70s cents a pound. So which way will they trend?

Morning markets: Hard wheat regains premium over soft, amid US dryness worries

Kansas City wheat outperforms, as Plains precipitation worries extend to a dearth of snow cover. But Kuala Lumpur palm oil hits a 16-month low
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© 2017 and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of the Briefing Media group
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069