2023-12-19 01:02:02
For months, the rain that falls in Brazil has been closely scrutinized by agricultural markets. The next soybean harvest will depend on the amount of precipitation, which will in turn determine the safrinha, the small Brazilian corn crop, which is small in name only.
“Vigilance”. This is the word that has been on the lips of grain traders for several weeks, because Brazil, which is finishing its soybean sowing, is entering a key period: the flowering phase, during which the plants are very sensitive to the weather. However, in the agricultural regions of Parana and Mato Grosso, the climate is disrupted by the El Niño phenomenon: too much rain in the south, too dry weather in the center-west, farmers had to postpone soybean sowing this year. fall, and because of the weather, they sometimes had to replant part of their surface, 10 to 15% in certain States.
Uncertainty about safrinha
This delay in sowing, coupled with uncertain flowering, could have an impact on soybean production, but also, indirectly, on one of the two corn harvests of the year: unlike the first harvest – the safra –, the second, called safrinha, is in fact sown on soya land, in February-March.
Due to the delay in the agricultural calendar, the window for sowing safrinha corn will narrow. Some farmers are anticipating and have already announced that they will give up double cropping. We must therefore expect a reduction in surface areas, and potentially a lower yield where the corn was sown later, because it will not have grown enough before the arrival of the dry season. However, this corn grown during this period is mainly intended for export, unlike that of safra which is generally reserved for the domestic market. Hence the markets’ attention to the weather, especially since Brazil is one of the two major exporters of yellow grains alongside the United States.
A shared market
For the moment, corn prices remain rather stable. The reason is to be found in the excellent American harvest which is ending, and also in American stocks expected to increase by 20 million tonnes. “ Uncertainties over future production are still too far away for the market to worry about them » summarizes Sébastien Poncelet, director of development at Agritel.
Soybean prices also don’t really react to the vagaries of the weather. “ The market is divided, it rains enough for prices not to soar, but not enough to fully reassure the market and allow prices to ease, which are struggling to go below the symbolic threshold – on the American market – of 13 dollars per bushel of 27 kilograms », adds our interlocutor.
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