Corn losses advance in the west of the South region

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Porto Alegre, November 16, 2020 – Corn prices seem to have found a negotiation point that allowed regional some stabilization. There is a few more offers in some locations, however, without accepting price lows at the moment. The exemption from tariffs in non-Mercosur imports, the release of imports of U.S. genetically modified corn, and the dollar decline have not yet been sufficient to promote any inversion of domestic prices and/or require imports. In fact, it seems that importation is inevitable in view of the losses that increase in the summer crop of the western section of the South region. If there is not an adjustment of demand to balance the low supply of the first semester, imports will be inevitable, even at high prices.

     Better rain had been forecast last week for the southern region of Brazil, with a resumption in other locations to allow the end of the planting and the development of already advanced crops. The rain really affected a good part of the country and regularized several areas which were already becoming troublesome, such as Goiás, Minas Gerais, and São Paulo. On the other hand, the rain arrived too late to recover the production potential in more advanced crops such as in Rio Grande do Sul and Santa Catarina, where the picture is of losses of 50 to 60% of production in the west of the region.

     In the western part of both these states, crops are planted in August and September and most are now under pollination and silking. In the central-eastern part, the crops are a little later and will enter their critical phase from the end of this month. Therefore, the losses in the west grow and already hit 50 to 60% of the production potential, in view of the pollination and silking in the midst of a drought. Some crops may even have an improved look with last week’s rain. However, the ears will be either small or defective. Other locations will depend on whether the rain will restart now. If the climate is not normal, the losses can be historic.

     In the South, southwestern Paraná, and São Paulo, where there is still a summer crop, last week’s precipitation hit between 20 and 30 mm depending on location. It is important to note that the rain has not been widespread or continuous to define that crops have similar advances in all locations. The rain needs to keep advancing since December will be the key month for these crops that will be reaped from March. It will be really difficult to have a good percentage of crops being harvested in January/February in these regions.

     Goiás and Minas Gerais received good rain over the week, the planting started to advance again, and the conditions have been good so far. Of course, the focus remains also on the continuity of the favorable climate scenario, as these are crops that will enter the critical phase in December/January, with harvests from April onwards.

     Agência SAFRAS Latam

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