South America Calling

Celeres Slashes Brazil 2nd Corn View by 10%

Celeres, a Brazilian farm consultancy, has lowered its 2015-16 second-crop corn view by 10% to 52.8 million metric tons (mmt) due to the hot, dry conditions in the center-west of the country.

As a result, output will now be 4.6% lower than last year, representing the first drop in the crop since 2009.

Dry spells of 20 days during April across key producing regions of Mato Grosso and Goias came at the worst time for corn crops entering reproductive phases.

That means irreversible losses and prompted Celeres to lower its Brazil average yield forecast by 10% to 85 bushels per acre.

"We also have to consider that the frustration (with losses) from the corn crop could be even greater," said Celeres in a report.

Late planting means that crops still need significant rain in May, which is a typically dry month. Celeres said it is putting a downward bias on its forecasts for the crop.

Total Brazilian corn output in 2015-16 is now pegged at 81.5 mmt, down 5.4% on the year before.

Less corn will obviously mean less product available.

With such a large portion of the crop already sold for export, shipments can't be cut that much. In its latest survey, Celeres reduced its export figure by 0.5 mmt to 27.5 mmt.

However, it reduced its domestic animal consumption number by 4% to 48.8 mmt, down 2% on last year, amid the expectation that internal prices will remain strong for the rest of the year. Ending stocks will also be squeezed. Celeres now pegs them at 5.6 mmt, down 26% on last year.



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