US officials cut their forecast for Brazilian corn production, amid a mounting debate over prospects for ongoing sowings of the safrinha crop – although ideas are easing of a shift from the grain to cotton.
The US Department of Agriculture’s Brasilia bureau slashed to 92.0m tonnes its forecast for Brazil’s total corn output in 2017-18, representing a 6.0m-tonne decline year on year.
The downgraded figure is also 3.0m tonnes below the USDA’s official forecast – which is up for revision on Thursday with the publication of the monthly Wasde report on world crop supply and demand, a key event of the grain market calendar.
Investors have forecast a downgrade in the Brazil crop output figure of a more modest 1.7m tonnes, to 93.3m tonnes, according to a Bloomberg poll, although the range of forecasts does range widely.
Main crop, safrinha crop
Indeed, Informa on Friday pegged Brazil’s corn output at 88m tonnes, comprising a 25m-tonne harvest of so-called main crop corn, planted in the southern hemisphere spring, and a 63m-tonne safrinha crop, seeded early in the calendar year, typically on land freed up by the soybean harvest.
Brazil last year harvested 30.46m tonnes of main crop corn and 67.38m tonnes of safrinha corn, according to the official Conab crop bureau.
However, prospects for the safrinha crop in particular have remained hotly debated, given the deterrent to seedings from weak crop prices – which are down 9.0% year on year in local terms, according to the Cepea institute – and delays to the soybean harvest, leaving land tied-up with standing crop.
The USDA bureau forecast safrinha sowings falling “slightly”, flagging “delays in the early soybean harvest, narrowing the window for planting second-crop corn, generally by the third week in February, to avoid the dry season in Brazil’s Centre West region.
The bureau noted a forecast from Imea – research institute for Mato Grosso, by far the top safrinha corn-growing state – that sowings of safrinha crop will drop by 9% year on year, with much of what is seeded planted beyond the ideal sowing deadline.
“Imea is projecting that as much as 30% of Mato Grosso’s corn crop will be planted outside the ideal window.”
Corn vs cotton
Still, the bureau also flagged that the late soybean harvest had represented a particular setback for farmers who were intending to plant cotton as their safrinha crop rather than corn,” due to attractively high global prices for cotton and already abundant corn supplies globally”.
Brazilian cotton prices are marginally higher than a year ago, according to Cepea.
“The downside of second-crop cotton is that it has a very limited planting window and must be in the ground by early February, a challenge given the slow start to the soy harvest this year,” the bureau said.
Imea has forecast Mato Grosso growers raising cotton sowings by 15.8% to 725,500 hectares.
However, as of late January, growers had just 20.2% of their intended cotton acreage seeded, compared with 46.6% a year before