February 8, 2010

Brazil corn crop estimate seen steady at 51 million tonnes

Brazil's 2009-10 corn production estimate remains at 51 million tonnes despite a 7% loss in planted area, according to a USDA attache report posted on Friday (Feb 5).

Estimates contained in attache reports are not official USDA data. The text of the attache report follows.

Brazil's 2009-10 corn production is estimated at 51 million tonnes, the same production level as last year, despite a 7% reduction in planted area, the greatest loss of area in 30 years.

As of mid-January, the summer corn crop is progressing well in Parana, Mato Grosso and Mato Grosso do Sul. Reported yields are above average due to optimal weather throughout the growing season in most of Brazil's corn regions.

In addition, the movement from corn to soy resulted in higher average yields for corn since the high-technology producers continued to plant corn while the low-technology producers switched to soy. A third factor boosting yields is an increased use in inputs due to a 30% cost reduction compared to 2008-09.

The summer corn crop's average yield is expected to reach 3,900 kilograms/hectare, 7.6% greater than the drought-reduced 2008-09 harvest. Parana, the top summer corn-producing state, is expecting a dramatic rebound with this season's average projected summer crop yield reaching 7,050 kg/hectare versus 2008-09's 5,140 kg/hectare.

Winter corn production (safrinha) now accounts for one-third of annual corn production in Brazil with planting occurring between late January and early March. Producers opt to plant a safrinha corn crop, despite low prices, to capture inherit benefits of crop rotation, including: breaking life cycles of diseases and pests and reducing soil erosion and moisture depletion.

Mato Grosso, has become the leading producer of safrinha corn in the past few years, comprising approximately 15% of Brazil's 2008-09 total corn production and 40% of safrinha production. Mato Grosso expects higher yields for second-crop corn in 2009-10 due to earlier planting and adoption of biotechnology varieties. Short season soy are being harvested a full month earlier in Mato Grosso providing increased opportunities for second cropping of corn or cotton currently occurring on 60% of first season planted area in the state.

Parana also produces a sizable winter corn crop which accounted for nearly 10% of the 2008-09 total corn produced in Brazil and 30% of safrinha production. In Parana, the trend towards planting more early-maturing soy varieties during the main season would allow producers to plant more corn as a second season crop. However, early indications from the Parana State Agricultural Statistics Agency (Deral) signal a slight decrease in planting intentions due to sluggish corn prices.

Winter corn yields tend to be lower than summer corn yields due to shorter-season varieties with lower yield potential coupled with greater weather risks at the end of the growing season, including frost and hail damage in Parana and droughts in Mato Grosso. In 2009-10, Mato Grosso safrinha corn average yields are expected to return to 4,345 kg/hectare, representing a 13% drop from a record 5.003 kg/hectare in 2008/09. In contrast, Parana's safrinha yields are expected to average 3,550 up from 17% from 2008-09's 3,024. The overall effect is stable safrinha production.