Analysts lowered estimates Tuesday for Brazil’s soybeans and corn crop, along with the country’s grain agency, Conab, thanks to a punishing drought that is parching crops in central Brazil.
South American grain analyst Michael Cordonnier, of Soybean and Corn Advisor, lowered estimates for soybeans to 97 million tons, and to 76 million tons for corn, cautioning that they could still fall further. The analyst said he had a “slightly lower bias” toward the soybeans and a ”lower bias” on the corn. The latest lowered estimate is close to what Cordonnier called a worst-case scenario in late April, when he said corn could fall to 75 million tons, instead of the projected 79 million tons.
“The safrinha corn crop is shrinking on a daily basis due to hot and dry weather in central Brazil and the market is worried that it will not be big enough to drive down domestic corn prices in Brazil by a significant amount.” Cordonnier explained in his newsletter.
Meanwhile Conab lowered its soybean estimate by 2 million tons to 96.90 million, compared with last year’s crop of 96.22 million tons, and also lowered its estimate of safrinha corn by 4.2 million tons to 52.9 million tons in May.
“The problem for both the soybean and corn crops in Brazil is that the crops are shrinking at the same time that the exports are being front-loaded and running at a very fast pace,” Cordonnier said.
The soaring exports that have cut off supplies of corn for hog and poultry producers in southern Brazil “could open up (more) opportunities for U.S. corn exports later this year,” Cordonnier said.