- Brazil’s second corn harvest is slower than normal this year due to moister weather.
- Frosts last week had minimal effects on the crops that were ready for harvest.
- Quality concerns arise for exports, which have been surprisingly stable for July.
- Mato Grosso and Matopiba are seeing intensifying second-crop harvests.
- Goiás is anticipated to make harvesting advances as rains help conditions.
- Pricing pressures are set to emerge in the domestic market for corn in July and August.
Current Status of the Corn Harvest in Brazil
The second corn harvest in Brazil is currently unfolding at a pace slower than usual for this time of year. Factors like moister weather typical for fall and the early winter days have hampered harvest conditions significantly. However, it’s widely acknowledged that eventually, this late harvest will accumulate, leading to a strangely clustered collection of crops. Fortunately, the frosts from last week have had little effect on the majority of crops since they had already passed the critical growth stage. There are some late outings from regional crops that may have seen damage from the frosts combined with the recent rainfall, but overall, the quality remains usable for storage. This quality issue is particularly pressing for exports, which, to everyone’s surprise, have been somewhat sluggish and stable for July, raising concerns about the liquidity on the domestic market. The planned increase of ethanol in gasoline to 30% is expected to boost sugarcane operations and foster new investments in corn ethanol, but it’s not going to significantly change consumption levels for corn intended for ethanol production in 2025.
Regional Differences in Harvesting and Weather Impact
As the second-crop harvesting process ramps up in key regions like Mato Grosso and Matopiba, the initial harvests are fulfilling contracts and addressing immediate local demands. In Goiás, conditions should ramp up this week thanks to recent rainfalls, aiding the progress of the harvest. Meanwhile, certain areas like Minas Gerais and São Paulo are beginning their sorghum harvesting efforts, yet the main focus for corn harvesting is set to kick off around mid-July. In other areas, particularly Paraná, Paraguay, and Mato Grosso do Sul, persistent rain in June has been a double-edged sword, extending harvest periods but potentially leading to increased moisture-related issues with certain corn hybrids. The widespread frosts hitting western Paraná and parts of southern Mato Grosso do Sul have resulted in a risk of quality degradation, although most crops were ready for harvest, indicating that volume losses are not anticipated. Even so, some very late crops in southern São Paulo have suffered frost damage.
Future Prospects and Challenges for Corn Sales
Looking ahead, the pressing question remains the flow of corn into the market, especially as around 100 million tons are expected to be available soon, along with an additional 10 to 12 million tons from Matopiba. Keeping in mind the current landscape, initial harvests will likely fit well with domestic demand. Yet, without a steady export flow, it could spell trouble for domestic prices in the upcoming semester. June’s export figures provide a somewhat bleak picture, reporting a mere 650 thousand tons with more shipments pushed into July. Eyes are on July’s projections, which suggest a potential 1.6 million tons, but this number pales in comparison to last year’s 3.6 million tons. Improvements must be made at key ports like São Luís, Santos, and Paranaguá to enhance the shipping situation; otherwise, ongoing shipments of soybeans and sugar could crowd out corn. Barcarena will likely continue to have logistical issues affecting its capabilities for this second half of the year. Given the slow rate of activity in July, heightened selling pressures are anticipated for both July and August, squeezing domestic market conditions and necessitating that shipments be concentrated in those months for optimal flow of corn from the second crop. Port pricing is a significant factor in determining domestic prices, reflected by last week’s CBOT prices falling to USD 4.00/bushel amid a dollar valuation below BRL 5.50, resulting in port prices hovering between BRL 63 and 66 a bag.
In summary, while Brazil’s second corn harvest is ongoing, it’s encountering setbacks due to wet weather and past frosts with little expected impact on overall yield. However, export concerns are burgeoning, particularly as domestic prices hang in the balance. The agricultural sector will need to navigate these layered challenges carefully, especially in light of slower exports and domestic market pressures.
