Concerns are growing that Brazil could see a significant reduction to its corn production this year, after a spell of dry weather across the country's Corn Belt - with market talk that a lack of rain could cut up to 9m tonnes from output. Terry Reilly, at Chicago brokerage Futures International, said that "concerns over dryness across central Brazil are mounting". "The weather in Brazil has definitely turned dryer over the last several weeks," said analyst Dr Michael Cordonnier, warning of damage to later planted corn crops. Bad news for safrinha Dr Cordonnier said the forecast, which gives a very low chance of rain over the next 10 days is "bad news for the safrinha corn crop". "It is unknown if this is the end of the rainy season or not in central Brazil, but every week that it does not rain is another week closer to the dry season." "Even if scattered showers did return to central Brazil toward the end of April, I think significant damage will have already been done to the later planted safrinha corn," he said. Second crop The safrinha is Brazil's second corn crop, planted after early soybean crops have been harvested. Although traditionally a smaller crop (the name means "little harvest") the safrinha is expected to be about 68% of Brazil's corn crop this year. Last week Conab, the Brazilian crop supply agency, lifted its estimate for the safrinha harvest by 1.82m tonnes, to 57.13m tones, up about 5% year on year. In fact, broker Benson Quinn Commodities noted that one analyst had estimated that the drought could cut 4m-9m tonnes from the Brazilian crop, although expressing scepticism over that figure, calling it "premature". Livestock squeeze "This is not going to be a catastrophe for the safrinha corn crop, but instead, a significant trimming of the production," said Dr Cordonnier, seeing yields down 5% in Mato Grosso, the top growing state, and a drop in output of 5-10% in Parana, the second-ranked state. "The biggest decline will be for the later planted corn in Goias, Minas Gerais, Sao Paulo, and Mato Grosso do Sul," Dr Cordonneir said. Any shortfall in the safrinha will be bad news for Brazilian livestock producers, who are already facing record corn prices. Long-term weakness in the real has driven heavy corn exports, creating a shortage in the Southern Brazil, where most of the feed demand is. The government has moved to remove an import tariff on imports from outside South America, to help livestock producers.
Brazil's woes continue to mount, with growing concerns that a dry spell across the nation's the Southern Brazil could cut up to 9m tonnes from output this year. Analyst Dr Michael Cordonnier says the forecast shows very low chance of rain over the next few days, which is "bad news for the safrinha corn crop" adding that "even if scattered showers did return to central Brazil toward the end of April, I think significant damage will have already been done to the later planted safrinha corn." Furthermore, any shortfall in the safrinha will also impact Brazilian livestock producers, who are already being hit by record corn prices.