In Mato Grosso, Brazil's largest maize growing area, the second corn crop will be up to 15% smaller because it is too dry there. This was announced yesterday by the president of the local farmers' association to Reuters.
In Mato Grosso, the second corn crop (Safrinha) is estimated at 25 million tonnes this year. The drought has struck, especially in the southern part of the country. In the middle part of Mato Grosso the harvest will be 10% smaller. The harvest starts there in about 40 days.
Mato Grosso harvested nearly 29 million tonnes from the Safrinha harvest in 2017 as the weather was almost perfect for the vegetation. The state produces about 30% of the Brazilian corn crop.
Brazil's Safrinha maize is grown after the soybean harvest and produces about 70% of the Brazilian corn crop, of which a large quantity is exported. This makes Brazil a strong competitor to the US, which is the largest supplier on the world market.
This year, the sowing of soybeans was delayed, so that the harvest began later. As a result, corn was also sown later, increasing the risk of dryness.
The situation puts farmers in bad straits, because they can not sell their harvest in advance until the danger of a crop failure is over. In many parts of Brazil, Argentina and Paraguay, farmers are hesitant to pre-sell because corn prices are so low.
Should the harvest not be as large as you sold in advance, replacement purchases are threatened with the obligation to compensate for the price difference. Until May 4, only 32% of the expected harvest was offered. It was only 29% last year, but it is much lower than the five-year average when 40% were sold out.
Text: HANSA Derivatives Trading GmbH /
