Safras predicts 2021-22 corn harvest increases in Brazil and shipments of 2m t from March to May

According to the consultancy firm Safras & Mercado, on Thursday, March 24, the 2021-22 corn harvest in Brazil may exceed current estimates due to favorable weather and a larger planted area than initially predicted, increasing supply at a period of heightened demand due to the conflict in Ukraine.

“We will review data next week and possibly increase our (harvest) forecast,” said analyst Paulo Molinari.

The consultancy firm estimates that second harvest yields in the center-south of Brazil will total 83.3 million tonnes, up 44% from the previous cycle, when the country suffered the effects of drought and frost.

“Don’t be surprised if the final result is actually greater than 83 million tonnes,” said Monari.

The analyst explained that a review is necessary because Mato Grosso, Goiás, São Paulo, and Minas Gerais planted more than initially projected for the second harvest.

He also said that Matopiba states (Maranhão, Tocantins, Piauí, and Bahia) also planted corn, possibly leading to record crop yields. If such analysis is proven correct, the country’s total production will increase. Current estimates are at 115.7 million tonnes versus  91.5 million last season.

If Safras’ last predicament is confirmed, because Brazil planted an unprecedented l21 million hectares of corn, the country will see a record-breaking corn production in 2021-22 despite the failure of the first harvest due to the drought that led to severe losses in southern states.

With a larger crop, the country could export 34.5 million tonnes of corn in 2021/22, up from 20.8 million in the previous season, but still below the 2018/19 record of 41.17 million.

2021-22 corn harvest exports

Molinari cited that Brazilian cereal exports responded to increased international demand in the face of decreased Ukrainian exports. Under these circumstances, shipments could reach up to 2 million tonnes in March, April, and May.

The analyst mentioned that these exports collaborate to tighten the supply and demand scenario further since the second crop harvest should only increase the volumes available next to the second half of the year.

However, he explains that “even though the situation may be difficult,” Brazilian producers are “accepting lower prices” while preferring to put soybean opérations on hold.

The average price of corn in the center-south, which exceeded 100 reais per unit of 60 kg sack earlier this year, is below that level, closer to 90 reais in several regions.

According to him, producers are selling corn to increase cash flow, stabilizing prices. However, because this movement reduces supply even further, the first harvests of the second crop should have sustained prices.

Molinari noted that while we wait for the so-called safrinha (interim harvest), there is a chance that prices will hike due to the weather, which includes risks of frosts.

Farmers should harvest the earliest crops at the end of May in a few areas of Mato Grosso, but most of it will happen between June and July.

See below the track record of Brazilian corn exports from January 2020 to January 2022. The data are from DatalLiner.

Corn Exports from Brazil (HS 1005) | Jan 2020 – Jan 2022 | WTMT

Source: DataLiner (click here to request a demo)

The analyst drew attention to next week’s report from the US government that should provide information on the planting of the US crop, which will override concerns about Ukraine’s crop availability.

The US is the largest global producer with an estimated crop of 373.2 million tonnes in 2022/23.

He predicted that the US corn acreage estimate, which some believe will fall by 2 million acres, may surprise positively, with planting not falling as far as the market expects due to high Chicago Stock Exchange prices.

“The fact that corn is valued at $7.50 a bushel absorbs any hassle in terms of the cost of production… These prices absorb all costs and offer margins,” Molinari said, noting that US farmers prefer corn over soybeans.

Source: Money Times

To read the full original article, please go to:

https://www.moneytimes.com.br/safras-ve-alta-na-colheita-de-milho-do-brasil-e-embarque-de-2-mi-t-de-marco-a-maio/

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