Porto Alegre, May 31th, 2024 – Brazil’s corn crop now has annual surpluses that allow for some situations with seasonal production losses, without having negative effects on domestic supply. It seems that this is what we are experiencing in 2024. The new survey from Safras & Mercado reveals very different situations in the 2024 crop in producing regions, at the moment with some production losses in the total crop. While we have severe production losses in some locations, we also have important surprises in the productivity that is being obtained in other locations. If productivity in Mato Grosso and Goiás confirms record levels by the end of the harvest, it is likely that this regional super crop will compensate for production losses in Mato Grosso do Sul and Paraná.
The Safras’ May crop survey revealed that the combination of planting dates and climate brought very interesting results for the second crop in some regions, such as Mato Grosso, Goiás, and Matopiba. Planting took place in an earlier window due to the advance of the soybean harvest cycle and corn planting progress. The information about the reduction in planting area has been confirmed, however, without the exaggerations imposed by the media and even official government sources. The climate was surprisingly good in this production axis, with warmer conditions of the Central Atlantic inhibiting the drought, natural for an El Nino in the center-north of the country.
In this update, we noticed the beginning of the harvest in Mato Grosso with yields of 120 to 170 bags, placing the state average with the potential for record levels. So, we increased the state’s crop based on the beginning of the harvest. Of course, as the results unfold, productivity investigations may determine higher numbers. Now, Mato Grosso has 42.5 mln tons, with potential for 47 to 50 mln tons depending on the productivity situation after the harvest.
In Goiás, a few crops began to be reaped last week. Very high results of 140 to 200 bags per hectare. However, these are the earliest crops, and we need to check the rest of the harvest, especially in the east of the state, where crops were planted later and harmed by the very dry and hot weather in May. The east registered a large part of crops still in pollination and silking stages amid a less rainy climate. Therefore, it is possible that we will have excellent productivity from the west to the north of Mato Grosso do Sul and low productivity in eastern Goiás. Sorghum will also be affected in the east of the state, and we will cut the productivity potential for the region, which is the main sorghum-growing one. As there is no forecast for rain anytime soon, it is possible that sorghum and corn will not have such good results in the east of the state.
In the region called Matopiba (which comprises the states of Maranhão, Piauí, Tocantins and Bahia), the situation is quite comfortable despite the area cuts this year. In Tocantins, as well as in Mato Grosso, areas planted earlier where the wave of sesame and rice planting was not enough to excessively cut the local corn area. With a lot of early planting, corn begins to be reaped in the state from late May, signaling productivity close to 100 bags/hectare, a satisfactory standard for a second crop of corn. Maranhão, Piauí and regions of Bahia follow the same line, however, with crops more focused at the end of June and July. There are localized problems with low investment in technology and leafhoppers. It is not a general situation for the bloc.
Western Paraná received the last rain last week. The crops in these locations have performed well, and even though they are not likely to reach their full potential, productivity must be excellent in the region. The picture is the same for the center-south of Paraguay, which begins its crop with excellent potential. Therefore, when production losses in Paraná are mentioned in the national agricultural media, we must distinguish which part of the state is more problematic. The center-north of Paraná was effectively affected by this dry May in the state. Many crops in a critical production phase, having already been harmed in March and early April, have had a deep cut in production. Yields below 50 bags/hectare with no recovery trend even with rain from now on. So, we have a crop very close to normal in the west and southwest of the state and south of Paraguay, but with sharp losses in the north of Paraná. The final number brings a new reduction in production for the state.
The area between central-northern Paraguay, central-southern Mato Grosso do Sul, and midwestern São Paulo will experience historic production losses. The rains that occurred last week in Mato Grosso do Sul bring very little improvement to crops. Crops with total losses, pollination failure, and small ears with 30 to 40% filling and weightless beans. An extremely dry month of May in a critical production phase is irreversible even with good rain from now on. Some central locations in the state have a slightly less traumatic situation, even with productivity that does not reach 70 to 80 bags/hectare. The north of the state has performed very well, with high productivity for a second crop and offsetting part of the losses in other locations. The production cut in the state is inevitable to less than 8 mln tons, against 13.6 mln in 2023.
São Paulo and Minas Gerais have later crops, are experiencing an extremely dry and hot May, with an initial cut in potential production. As the harvest begins and productivity becomes evident, it will be possible to evaluate this picture more consistently. However, the rainfall in both states does not leave good expectations for corn and or sorghum.
In this environment, we have a preliminary cut in corn second crop production from 86.6 to 83.6 mln tons, given the events that occurred in the crops most damaged by the May drought. In part, this situation is being compensated by high productivity in Mato Grosso. We would like to point out that it will not be any surprise if, during the harvest, the confirmation of high productivity in Mato Grosso leads the Brazilian projection again toward an increase in production. There are high production estimates for the state, which, depending on yields, may range from 45 to 50 mln tons for the state. Of course, this would compensate for the losses in Mato Grosso do Sul.
Also in the case of sorghum, we have cut the most optimistic productivity projections given the May climate situation. Now, there is still a good production estimate of 4.3 mln tons, but not as high as it could be in a more favorable climate condition. Paraguay has a contrasting performance in the production between its center-south and center-north regions. Very good crops in the south and losses similar to those of Mato Grosso do Sul, in the north. Thus, we are cutting Paraguay’s crop to 4.88 mln tons, against 5.4 mln in the previous projection.
The Brazilian supply situation is preserved. Even with production cuts in some states and still awaiting results in others, the 123-mln-ton crop is enough to meet all Brazilian demand without the risk of shortages. The fundamental point, without a doubt, is the flow of exports from now on. Despite the very bad first half of the year in national sales, we have Argentina now with lower availability compared to the previous projection, the United States still in the environment of defining the 2024 crop, so far very well planted, as well as the progress of the 2024 Ukrainian crop. In the midst of all this, the international market knows that Brazil has 40 mln tons to meet global demand. Exports above this level will adjust Brazilian stocks, while weaker exports will keep stocks still comfortable for 2025. So, the key to the internal environment continues to be exports.
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