March 18, 2009

Strong corn exports from Brazil in the first two months of 2009 have improved the outlook on winter crop plantings that were expected to drop significantly from last year due to weak credit and prices.

Douglas Nakazone, a grains specialist at analysts Agroconsult, said they had forecast earlier this year a drop of up to 50 percent in corn acreage in Mato Grosso due to the credit crunch, but the situation has changed.

Nakazone said the fall will now be likely 15-20 percent from last year.

Drought in Argentina has sharply affected its corn crop, which in turn increased export opportunities for Brazil in early 2009 when Argentina often has competitive export prices.

In the first two months of 2009, Brazil exported more than 2 million tonnes of corn, up from 721,000 tonnes a year ago.

Local prices have also recently increased, boosted by PEP auctions - a local government transport subsidy to help frontier grain producing regions compete with traditional areas that have better access to ports and large consumer markets.

Planting of the winter corn crop in Mato Grosso will take place from January to mid-March, after soy were harvested.

Farmers decided to plant corn even with low prices as there weren't many options, according to Luciane Copetti, agriculture and environmental secretary at Lucas do Rio Verde, a town that accounts for 10 percent of Mato Grosso's winter corn crop.