Officials nudged higher hopes for Brazil’s corn output, even while acknowledging the test from dry conditions which prompted one of the country’s top farmers to cut yield forecasts for safrinha crops.

Conab, Brazil’s official crop bureau, lifted by 440,000 tonnes to 115.7m tonnes its forecast for the country’s overall corn output in 2021-22.

The revision reflected raised expectations for the ongoing safrinha, or second crop, harvest, which was upgraded by 430,000 tonnes to 88.45m tonnes, “the highest production… in the entire historical series”, with the supply increase reflected too in enhanced export expectations.

However, the bureau added that “it should be noted that, even with an advanced stage of the crop, about 19% of the second corn crops are still under the influence of the weather”, which has remained worryingly dry in some areas.

“Yields in Minas Gerais, Goiás, São Paulo and Bahia are being impacted by the drastic reduction in rainfall from April onwards,” with crops sown “outside the ideal planting window” particularly at risk, the bureau said.

‘Atypical low temperatures’

The comments came even as SLC Agricola – which seeded 672,000 hectares of crops for 2021-22, an area nearly half the size of Montenegro – said that it was for a second time trimming hopes for its safrinha crop yields, citing damage from cold as well as dryness.

“Cotton productivity losses and corn were caused by the water deficit, which started in March in part of the Bahia and Mato Grosso States,” the group said.

“In addition, we had atypical low temperatures for the region, including frost information in Mato Grosso… which prejudiced the development of plants.”

SLC said its safrinha corn yield was now expected at 6.61 tonnes per hectare, down from a figure of 7.19 tonnes per hectare estimated in May, and an initial forecast of 7.71 tonnes per hectare.

For safrinha cotton, the yield estimate was cut to 1.40 tonnes per hectare, from a May figure of 1.64 tonnes per hectare, and an initial forecast of 1.80 tonnes per hectare.

‘Beneficial’

Conab, by contrast, edged higher its forecast for the Mato Grosso yield by 0.05 tonnes per hectare to 6.30 tonnes per hectare, although downgraded its expectation for Bahia to 3.90 tonnes per hectare.

While reporting that the last month had seen “no rainfall in relevant amounts in the areas with the highest concentrations of corn”, such dryness had proved “beneficial” for mature crops in accelerating drydown.

Although western and south eastern area of Mato Grosso had suffered “reductions in yields due to the restriction of rains that occurred from April onwards, in the middle of the grain-filling stage,” the conditions had not presented “significant problems” to other regions which have registered “excellent yields”.

Conab lifted by 500,000 tonnes to 37.5m tonnes its forecast for Brazilian corn exports in 2021-22, citing the extra output and “heated foreign demand”.

‘Irregular rainfall’

For cotton, Conab trimmed its output forecast by 28,000 tonnes to 2.79m tonnes, citing “irregular rainfall distribution” in Bahia.

The forecast for output in Mato Grosso, by far the top cotton-growing state, was held at 1.99m tonnes.

For soybeans, 2021-22 production was estimated at 124.0m tonnes, a figure reduced by a marginal 220,000 tonnes month on month, with the figure for exports held at 75.23m tonnes.

SLC Agricola also unveiled results of an annual valuation of its land portfolio, appraised at R$9.35bn by Deloitte Touche Tohmatsu, up by 35% from the R$6.94bn a year ago. On a same-farm basis, appreciation came in at 38%, the group said, viewing the growth as “validating the thesis of investment in land in Brazil” which is one of the company’s strategic aims.

SLC shares stood 3.9% higher at R$45.20 in lunchtime deals in Sao Paulo