W12 Maize (Corn) Update: Brazil's 2023/24 Safrinha Corn Crop Faces Dryness Concerns, Conab Reduces 2023/24 Corn Production Estimates

Brazil's 2023/24 Safrinha Corn Planting Reaches 93%, Dryness Concerns Rise

In Brazil, 93% of the 2023/24 safrinha corn crop was planted as of late W12, marking a 7% increase year-on-year (YoY). However, dryness concerns are emerging in south-central Brazil, with regions experiencing significantly below-average rainfall. While some areas received beneficial rain over the weekend, a heat dome forecasted for W12 in northern Argentina, Paraguay, and parts of south-central Brazil raised worries about soil moisture depletion, particularly for early vegetative safrinha corn.

Conab Lowered Brazil's 2023/24 Corn Estimate in Mar-24 Crop Report

In its Mar-24 Crop Report, the National Supply Company (Conab) reduced its estimates for Brazil's 2023/24 corn by 0.94 million metric tons (mmt) to 112.75 mmt due to a lower safrinha corn forecast, with safrinha corn acreage reduced by 129 thousand hectares (ha) to 15.75 million ha. This decline in safrinha corn acreage, down 8.3% YoY, was influenced by low corn prices, prompting farmers to opt for alternative crops like grain sorghum, cotton, sunflowers, sesame, and cover crops instead.

Safrinha corn yields are estimated at 5.54 metric tons (mt) per ha, with production forecasted at 87.34 mmt, down 0.7 mmt from the previous month and 14.7% lower YoY. Brazil's first corn crop production was adjusted to 23.41 mmt, a decrease of 0.19 mmt, while the third corn crop production remained unchanged at 1.99 mmt. Safrinha corn now represents 77.4% of Brazil's total corn production, with the first crop accounting for 20.7% and the third crop for 1.7% of the total.

Corn Exports from Mato Grosso, Brazil, Surged in 2023/24 Harvest

From Jul-23 to Feb-24, corn exports from Mato Grosso, Brazil, have surged to 28.32 mmt, marking a notable 12.73% YoY increase compared to the same period in the 2022/23 harvest. Remarkably, this volume surpasses the total exports recorded throughout the 2021/22 harvest. Several factors have contributed to this growth. Greater availability of corn in the domestic market combined with heightened interest from international buyers have played pivotal roles. This surge in external demand is partly due to reduced corn production and supply from top exporters like the United States (US) and Argentina. Notably, China has emerged as a significant buyer of Brazilian corn, particularly amid challenges faced by Ukraine due to the conflict with Russia. The Mato-Grossense Institute of Agricultural Economics (IMEA) forecasts that shipments until Jun-24 could reach 29.84 mmt for the 2022/23 harvest, marking a substantial 12.97% YoY increase.

Argentina's Corn Harvest Progresses Slowly Amid Wet Weather

According to the Buenos Aires Grain Exchange's monitoring data as of March 13, Argentina's corn harvesting covered 229 thousand ha, representing 3% of the planned area, with a weekly increase of 1%. However, this figure is below the average of the last five years, which stood at 7%. The harvested area has yielded 1.99 million tons of grain, with an average yield of 8.71 tons/ha. Despite the progress, the condition of the crops has somewhat deteriorated due to excessively wet weather conditions. 25% of the crops are in good and excellent condition, down from 29% the previous week. The percentage in satisfactory condition remains unchanged at 58%.

India Faces Corn Production Decline Amid Rising Ethanol Demand

Despite an increase in the planting area, India's corn production is projected to drop by 6.7% YoY to 35.5 mmt in the 2023/24 season, down from 38.08 mm the previous year. This decrease and growing demand for ethanol contributed to an uptick in corn prices. However, the United States Department of Agriculture (USDA) anticipates prices to remain stable through the end of the marketing year 2023/24. It's worth noting that corn prices in India are still lower than those of rice, wheat, and other coarse grains.