Second crop planting of corn is stimulated to rise

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The situation generated by a smaller summer crop this year and record 2019 exports created an environment of recovering prices for the Brazilian domestic market. At the same time, there is a good domestic demand for corn from the meat sector, as well as for the start of new corn ethanol mills. This combination of factors creates a positive price environment for the planting of the 2020 second crop. The fall of production in the South in the summer may accentuate this price scenario in the first half and add a motivational factor to the producers who are still undecided to plant a little later second crop and with usual climate risks. With high prices of physical corn, good rainfall in January and February in second crop regions and a positive demand factor, expectations are beginning to shift to the planting of this 2020 second crop, a scenario that has already been reflected in the demand for inputs.

The biggest difficulty for producers’ planting decisions for the 2020 second crop is on the soybean harvest schedule. Some farms are already being harvested in western Paraná and will advance in January, giving way to the planting of the second crop corn. It is a small portion of the region, but it will be the only corn with potential to be reaped in June. In Mato Grosso, early soybean crops begin to be harvested too. In this case, however, the following planting is cotton. In other second corn crop regions, there is still no forecast of a strong soybean harvest in January.

Definitely, good rainfall in January and February, the pace of the soybean harvest, high prices of physical corn and the second-season contracts that are being made by the domestic market, above the levels indicated by exporters, must be seen as motivational factors for planting the second crop this year. Therefore, the planting will occur with delay or not, outside the ideal period or not, but we will certainly have good cultivated areas. The difficulties for this planting are centered where the spring rains were delayed, that is, northern Paraná, eastern Goiás, Minas Gerais and São Paulo. In these locations, part of the soybean planting only took place at the end of November and December, which would take the second crop planting to March/April. Part of these crops must give way to sorghum (if there are seeds), wheat and millet. Could the planting delay too much? No doubt, but with a strong climate risk involved.