BRAZIL CORN WATCH: Prices stable amid strong progress in planting

Corn prices have stabilized over the week ended Feb. 11 in Brazil as rapid progress in the sowing of second-corn crop and high prices kept buyers on the sidelines, the local government agency and consultancies said in their reports.

Corn prices are likely to be stable in the coming days as there is an expectation that the second-corn crop will be planted within the ideal window, raising hopes of higher production this season, national agricultural agency Conab said.

Second-corn planting in the key states of Brazil, which account for 92% of the forecast area for marketing year 2021-22, continued the strong pace seen over the last few days, reaching 35.1% as of Feb.12 and well ahead of 10.2% recorded around the same period in the previous year, Conab said.

Brazil's 2021-22 corn crop will be marketed during February 2022-January 2023.

Corn prices are stable as producers are currently focused on harvesting soybeans, Brazil-based Center for Advanced Studies on Applied Economics, or CEPEA, said. Corn prices in Brazil are currently higher than the usual levels due to the expected fall in first-corn production as drought hit the southern states of the country.

The first-corn crop in Brazil is planted during September-December and harvested in February-May, while the second crop is planted in February-March and harvested in June-July.

Corn price received by producers in Brazil (Real/60-kg bag)

Weather forecast

The weather forecast is mixed for the second-corn crop in Brazil for February-April, which is a crucial period for crop development, especially given the losses in the first-corn crop production and low beginning stocks due to drought.

The multi-model forecast indicates that rainfall is likely to be normal to above average in practically the entire Midwest region, except in the central and western parts of Mato Grosso do Sul, where rainfall may be slightly below average over February-April, Brazil's National Institute of Meteorology, known as INMET, said.

Mato Grosso do Sul is the fourth-largest corn producer in Brazil.

Rainfall over southern Brazil is likely to be close to below average levels due to the impact of La Nina, INMET said.

"Low volumes of rainfall may reduce soil moisture levels in the southern region, mainly in western parts of Parana and Santa Catarina. In April, the model predicts a slight increase in [water] storage across virtually the entire region," INMET said.

Parana is the second-largest corn producer in Brazil.

Meanwhile, wet weather is likely to continue across northern Brazil this week, with the heaviest rainfall expected in Mato Grosso, Goias, and Minas Gerais. The wet weather will slow soybean harvesting and safrinha corn planting a bit, Maxar said in its daily weather report on Feb. 14.