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A Flood of South American Corn

South American Crop Watch

Local gymnasium doubles as corn storage as farmers seek places to stash grain

Published on: May 31, 2013

At the beginning of May I spotted a local article on a small town in far Southern Brazil that had turned the municipal gymnasium over to soybean storage as Brazil's ports clogged and local production climbed.

Such are the challenges of farming in Brazil, where on-farm storage is negligible, and public storage is tight. It gets even tighter as crops and exports grow, as they did in February, March and April partly as the result of short crops in the U.S.

Which brings us to recent rains in Brazil which have been, by all reports, North and South, rather leisurely in their retreat. Brazil's second-crop corn is usually referred to as, in local parlance, the safrinha—or little crop. That's because, traditionally, producers have scattered some seed and hoped for the best, not investing too much on inputs because, well, you never know just how soon the rains will abruptly stop. 

On the other hand, in the North producers need the corn-soy rotation. And, in the South last year, a good second corn crop saved the year for plenty of soybean farmers who lost yield in the main crop because of a bone-dry January.  It's meant that more and more Brazilian producers have started using ever-earlier soybean varieties, planted as early as they can be planted—and followed them with corn. And they've begun to invest a bit in that corn as prices have climbed and soybeans can be, hopefully, harvested a bit earlier.

SEE: BRAZILIAN CORN, BEAN CROPS UP

Consider what's going on in Brazil's top second-crop corn state, Mato Grosso. It's far from centers of poultry and pork production. The state's Agricultural Economics Institute says good rains through normally-dry May have contributed to an increase in the state's projected average corn yield, from 95 to 97 bushels per acre.

Yes, so much rain so long has dropped yields a bit in other parts of the state, but, between a tweak to the size of the planted area and good yields, the state is now projected to produce nearly 17.4 million tonnes of second-crop corn, up 8% from the previous estimate.

That change is reflected in the national corn production estimate, issued this month. Conab, an agency of Brazil's Agriculture Ministry, says the country will produce 46,685,200 tonnes of second-crop corn this year, vs. last year's enormous second crop of 39,112,700 tonnes.

With the U.S. returning, hopefully, to more normal weather this year, the Brazilians might want to think about building a few more municipal gyms.