South America Calling

After several years of running like clockwork, the story of Brazil's 2016 second corn crop has been of one problem after another.

First there were the planting delays caused by late harvest of the summer soybean crop. Then there was the extremely dry weather across the center-west in April and part of May.

On Thursday, the Agriculture Ministry lowered its second-crop corn view to 50 million metric tons due to the drought. That's down 8.4% on last year, bringing its number in line with those of private analysts.

Now, the threat of frost hangs over southern crops.

A series of cold air masses are due to move across the big second-crop corn-producing state of Parana in the next few days, causing thermometers to plummet.

It's been two years since frost has hit Brazil's corn regions of the south and area has expanded in that time. Late planting means the crop is more susceptible than in other years. According to the Parana State Agricultural Department, around 25% of the state's second-crop corn area, or about 1.2 million acres, is vulnerable to frost.

The first wave of cold has already arrived, provoking frost and temperatures as low as -6 degrees Celsius across the south of the state on Thursday morning. The south isn't a big second-corn region, but a new system is expected to hit the west of the state, which is, on Friday and Saturday and in the north, the other main second-corn area, over the weekend, according to the Parana State Weather Service (Simepar). The second cold air mass is expected to be stronger than the first.

The agriculture ministry expects Brazilian output to slide despite a 7.6% increase in planted area to 25.3 million acres.

Harvesting is just getting under way -- currently around 3% complete -- and will accelerate dramatically over the next few weeks.

The ministry forecasts Brazil will export 25.4 mmt in 2016, well down from 30.2 mmt last year due to the losses. Meanwhile, it is expected to import 1 mmt, down from 316,000 metric tons in 2015, but not that much higher than the average of the previous four years of 810,000 mt. Some of that corn may come from the U.S., although there could be issues as corn varieties commonly used in the U.S. are not approved here.

(CZ)

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