Commodity Shuttle: US delays corn planting, but it’s too early for celebrations in Brazil

End of April is a period of definitions for the second crop of corn in Brazil and for planting in the United States. Brazilian crops have registered small problems in regions of Mato Grosso, Goiás and Minas Gerais. Nothing compromising.

In the United States, planting has been at the lowest pace since 2013. The cold, snowy spring does not allow the North American producer to take the machines to the field.

Until Sunday (24), the Usda (United States Department of Agriculture) registered planting in only 7% of the area that will be destined to the cereal. Last year, the percentage was 16%.

In Argentina, the initial production potential of 57 million tons for the 2021/22 harvest has already been reduced to 49 million.

With forecasts of a good safrinha in Brazil, Brazilian producers are keeping an eye on the problems of North Americans and Argentines.

A crop reduction in these large producers will give a new boost to cereal prices. There’s already talk of $10 a bushel (25.4 kg) in Chicago because of this.

Too early for celebrations, says analyst Daniele Siqueira, from AgRural. Three factors could raise prices in the second half: a break in the Brazilian safrinha, complications in the United States and a very high dollar.

In the United States, it is still too early to assess how planting will be, says Daniele. The Americans are waiting for a warmer period to avoid replanting, as the cost of production this year is much more expensive.

She recalls that delay in planting, although it can bring about some complications such as concentration and eventual frost in September, does not mean loss of productivity.

The recovery potential of North American producers is very large. “Last year, in this same week as we are now, they sowed 11 million hectares in just seven days, practically a third of the area.”

US farmers still have 45 days to plant corn. If in the second half of May, however, the condition of the land is still not ideal, then the crop will be affected. In this case, producers choose soy or stop planting, receiving insurance, according to Daniele.

In Argentina, the drop in productivity occurred with the first plantings. The corn sown later registers higher productivity.

The Argentines will certainly have a lot of cereal to put on the international market, competing with Brazil.

Last year, their exports totaled 41 million tons. For this crop, USDA estimates 39 million.

According to the exporters’ records made in the government system, export contracts already total 23 million tons, up from 21 million in 2021.

The North Americans, with the reduction of 1.6 million hectares in the planting of corn, should harvest, under ideal conditions, 376.5 million tons. A small reduction in productivity, however, could bring the crop to 365.2 million.

In Brazil, the safrinha will be close to 90 million tons. Along with the summer, the total volume will be 117 million in 2021/22, according to still provisional figures from AgRural.