Brazil trims corn crop forecast again

Brazil's government cut its forecast again for corn output this season because of drought, although the harvest might still reach a record above 100mn t as the acreage increased by 5.4pc.

Brazil is expected to harvest 100.6mn t of corn in 2019-20, up from 100mn t the last cycle, but down by 0.4pc from June's estimate, according to the country's agricultural statistics agency Conab.

The new forecast is still a historical volume, but the outlook has been systematically cut as a severe drought hampered the crop's development in key-producing states, such as Parana. Even Mato Grosso, Brazil's top grower of the cereal, will have a worse performance this year because of unfavorable weather conditions, Conab said.

A record acreage of 18.4mn ha, however, has been contributing to offset yields' losses.

The acreage expansion may be a consequence of market prices, which reached levels lucrative enough to encourage farmers to sow more of the crop, Conab said.

The winter corn crop (safrinha), which usually accounts for three-quarters of national output, was the worst hit by drought. It is poised to reach 73.5mn t, almost flat in comparison to 2018-19, but down by 1pc from June's forecast.

As for the soybean crop, the harvest for which has already been concluded, output is pegged at a record of 120.9mn t, up by 5.1pc year-on-year. Cotton lint production is seen at 2.9mn t, a 4pc increase over last season.

Considering all the grains and oilseeds, Brazil is on track to harvest a 251.4mn t record in 2019-20, up by 0.4pc over June's forecast and 3.9pc year-on-year.

No cut seen for exports

Conab kept its estimate for Brazil's corn exports in 2019-20 at 34.5mn t, but reduced the ending stocks' figure to 8.7mn t, from 9.9mn in June, as the harvest is now seen smaller. If accurate, inventories would be the lowest since 2015-16.

Regarding soybeans, Conab expects up to 80mn t to be shipped overseas in 2019-20, compared to 77mn previously estimated. The pace of exports has been quite robust this year amid a favorable currency exchange and a firm appetite from foreign buyers — especially China.

Brazil is the global top producer and exporter of soybeans and the second-largest producer and exporter of corn.

By José Roberto Gomes