Porto Alegre, September 8, 2020 – Record prices, consolidated upward movement, and excitement by Brazilian growers have not yet been enough to change the planting intention for this 2020/21 summer. In fact, a large part of inputs are already purchased for soybeans, and growers do not seem inclined to switch from soybeans to corn. However, switching from corn to soybeans seems quite clear, also because of the prices that are being charged for the new soybean crop, besides the media’s appraisal of the success of the commodity. Growers should once again plant a large soybean crop followed by a huge new corn’s second crop in 2021. Any reversal in the summer corn planting scenario seems difficult.
The update of the production for the 2019/20 crop shows a slight cut to 106.8 million tons. This reduction stemmed from the results of the final harvest in Paraná, Mato Grosso do Sul, São Paulo, and Minas Gerais in late August and early September. Owing to the drought in the Brazilian fall, the second crop had losses in productivity potential, which are now being confirmed at the harvest. Small adjustments still need to be made until the end of the year, without strong structural changes in the final production.
The update on the planting trend for the 2021 season also pointed to some minor changes and confirmations. The bias of cut in the summer area in some states that still have a satisfactory area to be replaced was maintained and accentuated. In São Paulo, Goiás, and Minas Gerais – states that still have a more considerable summer area and the opportunity to carry out a summer planting with soybeans and the corn’s second crop – the cut in the summer corn was sharper. Growers are very inclined not to miss the opportunity of high profitability with soybeans and have the opportunity to plant the corn’s second crop. So, it is really difficult to observe an increase in the corn area. There are some chances through a different rotation with beans in some areas, by first planting corn and then soybeans.
In the Midwest, even with high corn prices at this moment, it is very difficult to change one’s stance to the detriment of soybeans. In the South, however, the increase in corn may be convincing more traditional growers and with crop rotation to try to maintain areas with corn in the summer. In far western Rio Grande do Sul, and Santa Catarina, the planting of premature corn with subsequent planting of soybeans have been a model that guarantees some maintenance of the area planted with corn. This does not allow the return to the traditional model of soybeans in the summer and wheat in the winter.
Rain in late August and early September in the Southern region allowed the planting start in several locations. It is not a level of comfortable moisture that guarantees a continuous profile for crops. In Paraná, for example, the picture is of general drought and some planting started only in the far south of the state. September has been a dry month again, and there is no forecast for good rain this month. Only Rio Grande do Sul and Santa Catarina have slightly better conditions at the moment.
We must understand that the Brazilian spring begins with a drought started in the winter. There is no soil water reserve. As a result, summer crops will depend on regular rain from now on to make the planting and crop development feasible. The weather models are somewhat divergent, even amid Brazilian forecasters themselves. The transition from neutral weather to confirmation of La Nina seems to hinder weather forecasts or make them divergent. What there is actually is that La Nina begins to build on the cooling of Pacific waters on the coast of South America and its trajectory brings a 2020/21 crop in Brazil and Argentina with several potential risk conditions.
Meanwhile, the corn’s second crop is finishing its harvest this week, the planting of the summer crop is advancing in the west of Rio Grande do Sul, and Santa Catarina. The weather, from now on, will be fundamental for this planting pace, including premature soybeans, which will allow or not a 2021 second crop planted within a good window. The excitement of growers about the planting of the 2021 crop is as significant as that of the summer soybeans.
Agência SAFRAS Latam
Copyright 2020 – Grupo CMA