The Brazilian corn crop was revised downwards in this May update, made by Safras & Mercado. The cut in the second crop is the central point of this assessment, in view of the strong drought hitting mainly Paraná and southern Mato Grosso do Sul. However, the central point remains the export flow due to the strong devaluation of the real. Port prices have risen sharply and opened up a new opportunity for the business flow in the second half of the year. Meanwhile, the social isolation remains as the focal point of the internal demand environment, which, we hope, is reaching a phase of reversal.
The 2020 second crop showed clear symptoms of potential difficulties since the beginning of planting. The delay in the soybean harvest and consequent delay in the planting of the corn second crop was the first symptom of lower potential yields and higher productivity risk. Then, attention turned to the fall, that is, the rain regime and risk of frost. At this point, March and April were months with occasional rains in states such as Mato Grosso do Sul, Paraná, and western São Paulo. The symptoms of stress appeared in March, and rains in these locations in April could have created a symptom of improved crops. However, most crops started to enter the pollination and silking stage in April and continued so through early May. Absence of rain in the second half of April, accumulated water deficit, and culture stage: an unforgivable formula in this condition of corn pollination and silking.
