Losses in Southern Brazil requires even bigger 2020 crop of corn

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             The climate scenario for this South America’s summer crop brought variables that worried at the beginning of planting in some regions and now brings effective losses in others, particularly in Rio Grande do Sul. Although the rainfall profile was regular until late November, December brought high temperatures and below-normal rainfall in much of Rio Grande do Sul, which continues in January. In other parts of the country, however, the weather was very favorable in December and early January, which will ensure a good condition for crops, but with modest areas planted this summer. The cut in the summer crop production reflects this picture and involves nearly two million tons. With losses of around 600,000 tons, the 19/20 national crop is now estimated at 103.2 million tons. This framework puts additional pressure on the second season of 2020, which will depend on the schedule of the soybean harvest, prices and weather conditions in this first half of the year. One situation is very clear: producers are willing to take some climate risk for the second season in the face of this new price and production framework. The situation helps strengthen domestic prices in the first half until Brazil’s second corn crop is confirmed.

           The condition of climate neutrality in the second half of 2019, which will remain for this first quarter of 2020, undoubtedly aggravated uncertainties regarding the size of the Brazilian crop. The irregularity of the weather had not been anticipated by models in meteorological services, and producers risked a planting similar to that of 2019. Too premature soybeans in Paraná and Mato Grosso planted amid delayed spring rains were the initial signs. Then rains remained delayed in a range that went from western Paraná and Mato Grosso do Sul to Minas Gerais. Only in December, the central axis of the country managed to register a climate rebalance. Mato Grosso continued with normal rainfall, and soybean crops developed ensuring the harvest start this January.