0
Home
News
Directory
E-newsletter
Magazine
Events
Data
AgReport
Subscribe
Analysts slash Brazil winter corn crop forecast
May. 6, 2016
Dry weather plaguing Brazil’s center-west corn belt in recent weeks has weighed on forecasts for the winter crop, which have fallen on average by 5.4 percent in a one month-period, a Reuters survey showed.
Brazil’s winter harvest, also known as the second corn crop, which accounts for two-thirds of annual production, will reach 54 million tonnes in 2015-16, according to the average of 11 estimates by analysts and government bodies.
The average of the previous forecasts by the same sources, issued in early March to early April, before the drought, pointed to a record 57.1-million-tonne harvest.
And consultancy and brokerage INTL FCStone issued an update, cutting its forecast by 12 percent.
The firm projected the second corn crop at 49.8 million tonnes from 56.6 million tonnes in April,
Dry, hot weather dominated most of April, concerning many farmers and market players, and late-April rains were not sufficient to avert severe losses in some regions.
In the survey, there was a split in analysts’ outlook, depending on the estimates’ release date.
Those issued on April 6 and 7 raised their forecasts. The remainder, released in late April and early May, cut their estimates to an average of 53.25 million tonnes. Agroconsult, which on Tuesday slashed its forecast by 6.3 million tonnes, said: “The new estimate is due to the ongoing dry weather over Brazil’s center-west, which is undermining potential yields.”
“Goiás is the worst state. Minas Gerais is also in bad shape,” said analyst Daniele Siqueira, at AgRural, adding it will release its new winter crop estimate with a strong downward trend on Thursday.
Poultry and pork industries, the main consumers of corn in the country, are counting on the new crop — which will begin to be available after harvest kicks off in June — to tackle a severe shortage of the grain on the domestic market.
After strong exports from July through February, local corn stocks were almost depleted, forcing companies to source the grain from Argentina and Paraguay. Some are even considering importing cargoes from the United States.
Consultant Céleres stressed that losses to the winter crop “will lead to an even tighter scenario on the corn market, keeping domestic prices high during the rest of the year and into 2017.”
Crop losses may also impose financial stress on farmers with large loans or for those who have received forward payment for large portions of their expected production for future delivery.
“Many farmers signed forward sales contracts for more than 65 percent of their production, but that was based on regular yields,” said independent consultant Carlos Cogo, stressing that some farms may lose more than half of their expected harvest.
Source: Reuters
More from AgroNews
Change
Hot TopicSubscribe
| Subscribe Email: | * | |
| Name: | ||
| Mobile Number: | ||
Comment
0/1200
NEWSLETTER