Consultant Lowers Brazil's Corn and Argentine Soybean Crop Pegs

Posted on 03/09/2017 10:23 AM

A stark contrast in weather events led South American Crop Consultant Dr. Michael Cordonnier to change his Brazil corn and Argentine soybean production estimates from last week. He notes ongoing dryness in central Brazil is behind his 1 MMT lower crop peg to 82 MMT, while extensive flooding in Argentina led him to lower his soybean crop by 1.5 MMT to 59 MMT.

Regarding dryness in Brazil, Cordonnier says, "There is growing concern in Brazil about the dry weather in central Brazil and the potential impact on the safrinha corn crop. The hardest hit areas are generally the states of Goias, Minas Gerais, Sao Paulo and Mato Grosso do Sul. In this area, some farmers are approaching 40 days without rain. There are also concerns about the dry pattern in parts of eastern Mato Grosso and northern Parana."

Brazil's Conab estimates that safrinha corn acreage accounts for around 64% of total corn acreage this year, with full-season corn acreage around 36% of total acreage. "I would estimate that approximately 40% of the safrinha corn is in various levels of moisture deficits," says Cordonnier. "If this weather pattern persists, it would not be a disaster for the safrinha corn crop, but it would certainly reduce the yields especially of the later planted corn."

Dr. Cordonnier 2015-16 Soybean Estimates
Est.
Maximum
Minimum
2014-15

in million metric tons

Brazil
98.5
100.0
97.0
96.2
Argentina
59.0
60.0
59.0
60.8
Paraguay
8.8
9.3
8.3
8.4
Bolivia
3.0
3.3
2.7
2.6
Uruguay
3.0
3.2
2.2
3.1
Total
172.3
175.8
166.2
171.4
Dr. Cordonnier 2015-16
Corn Estimates
Est.
Maximum
Minimum
2014-15

in million metric tons

Brazil
82.0
85.0
78.0
85.4
Argentina
25.0
26.0
23.0
27.0
Paraguay
3.1
3.4
2.7
3.0
Bolivia
0.7
0.8
0.6
0.7
Uruguay
0.5
0.6
0.4
0.5
Total
111.3
115.8
104.7
116.2


Meanwhile, Cordonnier says heavy rains and flooding over the past two weeks have taken a toll on the soybean crop in eastern Argentina. "Farmers had expectations for very good yields after a nearly ideal growing season, at least until several weeks ago," he notes. "Farmers in the provinces of Santa Fe and Entre Rios are now facing extensive loses due to flooding."

"Part of the problem is that this region is very flat," adds Cordonnier. "There is no slop to the land, so the water drains away very slowly and any further rains would exacerbate the situation even further. Additionally, these are not fringe production areas. Some of these areas are in the northern core production region which contains some of the most fertile soils in Argentina."

Due to flooding, Cordonnier expects logistical problems as well, with fewer trucks able to transport soybeans to processors and export facilities. "The processors are running well below capacity and only about 60% of then normal truck volume is arriving at the ports," he adds.

Cordonnier also lowered his soybean crop estimate for Uruguay by 500,000 MT to 3 MMT due to heavy rains and says he has a lower bias moving forward toward the Argentine corn crop. "If the wet pattern persists in Argentina, the corn estimate will most likely decline in subsequent reports," adds.


 

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