Porto Alegre, January 10, 2022 – The picture of the 21/22 Brazilian summer crop is not comfortable. As we already assessed in December, production losses in Rio Grande do Sul were significant and irreversible regardless of any climate improvement. The problem is that the climate has not improved, the rains continued spotty, temperatures high, and this picture expanded to the summer corn localities in midwestern Santa Catarina and southwestern Paraná.
There are significant soybean losses in western Paraná, southern Mato Grosso do Sul, and Paraguay. However, the volume of corn crops in these locations is very discreet to the point of affecting the national numbers. In other regions of Brazil, the summer crop has performed well and must have good results.
Unfortunately, it is naive to point out that a better situation in one region will compensate for intense production losses in the South. The situation now seems to get worse for Argentina, with high temperatures and also spotty rainfall. The La Nina factor boosts the price variable for corn and soybeans and, in the case of the former, involves the worst carryover stocks in Brazil since 2012 along with high exports in January.
The ‘positive’ point is that the soybean cycle has occurred sooner than normal, and the second-crop planting will be done in an excellent window, provided that the rains return in growing regions. The environment is consolidated for a period of high corn prices until the start of the 2022 second crop, from June, not least because importation seems far from being viable in that period.
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