2024 second crop of corn maintains national projection despite regional losses

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corn

Porto Alegre, April 17, 2024 – Brazil’s 2024 corn second crop has a very different profile compared to the traditional one. From planting in each state to the regional climate effect, there are major differences that must be considered for production and the market. There are cases of very early planting, as never happened before, and very late planting. In this conception, we have crops that are exceptional in their productivity potential and will begin to be reaped in May, as well as crops that still depend on at least sixty days of weather for definition. At the moment, a second crop of 86.6 mln tons, slightly lower than the previous projection, and a national output of 126 mln tons are the new updates from Safras & Mercado. Of course, as we pointed out, we still have an important definition deadline for part of the national production, and this number can still be changed, despite the exceptional conditions of the second crop in the center-north of the country.

The update of Brazilian production estimates was carried out last week by Safras & Mercado. Initially, the summer crop was not changed and maintained the production profile for the center-south of the country at 25.6 mln tons due to the productivity that is being confirmed with the progress of crops, in fact, in some locations already closed. This production is sufficient to meet regional demand until the start of the second crop in most consumer regions in the country. A compensatory point is the very weak Brazilian exports in the first half of the year, starting in February, and with no prospect of improvement until June.

The 2024 second crop, as we have pointed out in our newsletters, would not have a “normal” environment for the seasonality of national production. At this point, some indicators are essential to understand this year’s second crop and its production potential:

– There were actually cuts in the acreage of all producing regions, and in this estimate we did not change these data, as they are quite adjusted to reality. Unfortunately, market sources do not have correct data for the 2023 second crop and reflect exaggerated cuts for 2024;

– The planting was switched for sorghum and other crops from sesame to cotton on a regional basis;

– The planting of the corn second crop presented all kinds of theories and justifications for cutting the area. However, the earlier-than-normal soybean harvest in several locations due to the hot and drier climate opened an unprecedented planting window for second-crop corn. We have plantings carried out from December to the end of March, depending on region;

– At this point, a small crop is widely distributed in its planting and will also bring differentiation to the regional harvest. The climatic effects on production this year are not uniform due to different planting stages. So, we have crops suffering from a strong drought in parts of Paraná and Mato Grosso do Sul, but exceptional situations in Mato Grosso and Goiás;

– We can say that crop conditions in 2024 are better than those registered in 2023, a year in which yields set records. This situation still limits productivity due to the reduction in technology applied this year in several locations. Otherwise, we would have a new regional productivity record;

– Mato Grosso, Goiás, Minas Gerais, and Matopiba currently have exceptional conditions and high productivity potential, particularly in the first two states, with a large part of crops already safe from greater risk. Minas Gerais and part of Matopiba will still depend too much on the weather in May and June;

– The harvest will begin next month in regions of Mato Grosso and Goiás, with higher volumes for June and July, that is, a very early second crop;

– In part of Paraná, between Palotina and the border with Mato Grosso do Sul, the crop situation is quite critical, despite the rain that occurred last week. We will have losses in this region and, therefore, the state’s crop is being cut by almost two mln tons, as rain from now on will not recover part of these crops. The far west of the state as well as the south of Paraguay appear to be in good condition;

– Between the south of Mato Grosso do Sul and São Gabriel, crops have all types of configurations. Some planted only at the end of March, others in development, and some in the critical phase of pollination and silking. This situation also involves a large part of western São Paulo and northern Paraguay. The losses in these regions are irreversible, and that is why we are cutting potential production in this region of Mato Grosso do Sul by almost 2 mln tons. Even with rain, this loss already exists. In the northern region of the state, crops are in perfect condition and with great productive potential, which still balances local production. However, most of the local crop will still depend on the weather in April and May.

With such an environment, losses above four mln tons in Paraná and Mato Grosso do Sul are being partly offset by the increase in potential productivity in Mato Grosso, Goiás, and Matopiba. Of course, the second crop is not defined, but the losses known so far are calculated and could worsen depending on the weather in May and June. Tocantins has an earlier cropping cycle and must start reaping at the end of this month in some locations. Maranhão and Piauí have greater concentration from June.

The national crop is now updated to 126.1 mln tons, with a second crop of 86.6 mln tons in the center-south of the country. Technically, this condition allows us to export up to 45 mln tons this business year without major damage to domestic supply. This is different, however, from pointing out upward or downward movements in prices. Instead, we should point out that domestic prices will have to align regionally with export levels of the second crop, in fact what is already starting to occur in Mato Grosso and Goiás.

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