Porto Alegre, April 5, 2022 – While the 2022 US crop is being designed, the Brazilian crop is developing, and the Argentine is being reaped. We need to understand that South America’s losses have already been priced in by the CBOT, the Ukraine effect on world corn supply has already been equalized, and now what really matters is whether Brazil, with its corn’s second crop, and the United States, with its production, will be able to supply the world market in the second half of the year. At this point, we focus on the fact that the Brazilian summer crop is still being reaped, and the results on the eastern side of Southern Brazil show better productivity than initially expected in the midst of the drought. Besides, the second crop has improvements in its planted area and satisfactory climatic conditions in the main growing regions. If the harvest of the second crop is reaped within its normal schedule, there will be an important market differential compared to 2021, when the very late planting lengthened the off-season in the first half of the year.
Brazil’s 21/22 crop is being updated in early April to 118.1 mln tons, above the last estimate of 115.6 mln tons. The first point for this correction is the summer crop. Record productivity in the Southeast region, Goiás, and Matopiba in the summer. Productivity slightly better than expected in the south of Brazil, on the east side of the region, despite the drought in the summer. We increased the summer crop from 20.3 to 21.2 mln tons. A correction that barely changes the internal supply picture but that improves the regional domestic availability environment.
We also increased the production of Matopiba. Besides excellent production in Bahia in the summer crop, we have an important advance in the planting of the second crop in Maranhão and Piauí, with a potential record area. Under very favorable weather conditions, the production projection remains high. The production of both these states will need to be mostly bound for exports in the second half of the year.
Finally, the 2022 second crop. After a difficult planting start in Paraná and Mato Grosso do Sul due to lack of rain, the situation began to settle in March, and planting was completed. Now, the rains in March were very favorable to these regions, including Paraguay. Some crops in Paraguay and the extreme west of Paraná will already be reaped in May, crops planted in May in the midst of the drought. But the vast majority of crops will be entering pollination and final silking in April and May, and a third set of crops in June. Part of the crops will still be susceptible to frosts in June or even May.
The first cold front of the fall arrived in Argentina last week with frost in some places, nothing out of the ordinary but making temperatures plummet in southern Brazil. In La Nina years, cold fronts are always very aggressive and bring surprises to this portion of crops susceptible to frost at the end of May and June. So far, weather forecasts have not shown a great possibility of aggressive frost in April and May in second-crop areas.
Thus, with data slightly better on acreage in Mato Grosso and Goiás, the point of short-term attention is Minas Gerais, with little rain registered in March in some locations and which may bring some local situation to the newly-planted second crop. The weather picture in Mato Grosso, Goiás, and São Paulo has been very favorable so far and even surprised growers.
The second crop production is now projected at 84.6 mln tons, up from the last estimate of 83.3 mln tons. We must still wait for the weather development in April and May to reset the potential productivity of 2022. An average below 100 bags for the off-season seems conservative, but, given the year of La Nina and the more discreet technology of this second crop, it is important not to overestimate yield.
The national crop, now projected at 118.1 mln tons, may be adjusted upward if the second crop yield confirms the reflection of good weather conditions for the next 60 days.
Agência SAFRAS Latam
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