Brazil - Crops likely to face heat stress this week on dry weather

11.01.2022 151 views

Corn crops in the southern parts of Brazil are likely to continue to face heat stress as dry weather has been forecast for the week ending Jan. 17.

Heat in Rio Grande do Sul will also add stress to crops this week. Wetter weather is finally expected in southern Brazil next week, which should begin to ease dryness, Maxar said in its daily weather report on Jan. 10.

"In the southern region, the week will again see little rain, mainly in Rio Grande do Sul, Santa Catarina and western Parana. Significant volumes of rain are forecast only in eastern Parana, and Santa Catarina, and may exceed 100 mm of rain during this period (Jan. 11-17)," according to Brazil's National Institute of Meteorology, also known as INMET.

Corn yield is expected to be lower than the initial estimates in some of the southern states of Brazil due to inadequate rainfall.

In Parana, first crops are being harvested and confirmation of yield losses is seen due to heat stress, national agricultural agency Conab said in its weekly market report.

As of Jan. 8, the harvest of first corn in the key states of Brazil, which accounts for 92% of the forecast area, reached 3% of the estimated area for MY2021-22 as compared to 2.1% a year ago, Conab crop progress report showed.

Brazil's 2021-22 corn crop will be marketed during February 2022-January 2023.

Corn prices in the spot markets are moving up due to the reports of yield losses.

In Brazil corn sellers are withdrawing from the market due to prevailing weather conditions in the south, while buyers are in need to replenish their stocks, Brazil-based Center for Advanced Studies on Applied Economics, known as CEPEA, said.

Corn price indicator tracked by CEPEA rose to Real 94.43/60 kg ($16.65/60 kg) on Jan. 10 from Real 90.35/60 kg on Dec. 30.

Moreover, weather conditions are also not conducive for corn production in Argentina which is a key supplier to livestock feed manufacturers in southern Brazil.

"Dry weather is expected to continue this week and temperatures are expected to become much hotter. High temperatures of 100-110°F (38-43°C) will be widespread across Argentina this week, which will lead to significant stress on the corn and soybean crops as soil moisture continues to decline," Maxar said in its weather report.

Although Brazil is among the world's largest exporters of corn, the southern states often import from Paraguay and Argentina as it is cheaper than transporting corn from the Midwest region of Brazil, where the bulk of the country's corn crop is grown.

The animal protein industry, a major consumer of corn feed, is concentrated in southern Brazil.

The first corn crop in Brazil is planted during September-December and harvested in February-May, while the second crop is planted in February-March and harvested in June-July.

The first corn crop accounted for 25% of Brazil's total corn production in 2019-20.

Corn exports continued to remain strong with Brazil exporting 697,476 mt of corn in the first five working days of the month, data released by the Brazilian Foreign Trade Secretariat showed.

The country exported corn at a daily average of 139,495 mt in the first five working days of January against 117,315 mt in the whole of January 2021.

Corn exports from Brazil are finally picking up after being largely slow since the beginning of the 2020-21 marketing year as 2020-21 corn production suffered losses to drought and frost.

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