May 2, 2018 / 8:53 PM / in 3 months

Brazil drought hits second-corn, dry spell persists

SAO PAULO (Reuters) - Brazilian farmers who cultivate the annual second harvest of corn face the prospect of lower yields and crop failure due to drought affecting fields in top producing states, analysts and a weather forecaster said on Wednesday.

Second corn is planted after soybeans as a rotation crop in Brazil, the world’s second-largest exporter of the commodity.

INTL FCStone said dry conditions last month prompted it to cut average yield estimates for second corn to 5.15 tonnes per hectare from 5.37 tonnes in its April forecast. The consultancy also cut its forecast for Brazil’s second-corn output by 4 percent to 60.5 million tonnes.

The expectation of tighter supplies has caused domestic corn prices to rise nearly 36 percent in April from the same month a year ago, according to Cepea, a research center associated with University of Sao Paulo.

Paraná state, Brazil’s second-largest corn producer, has had nearly three weeks without rain, said Marco Antonio dos Santos, a forecaster at weather consultancy Rural Clima.

“Until about May 10, the weather will stay very dry in that state,” he said. “The last time it rained abundantly in Paraná was at Easter (April 21).”

Planting delays are a major factor restricting output and yields, after farmers in many areas harvested soy later due to rainy conditions that also pushed back planting of corn, he added.

“If farmers had planted inside the ideal window, we would not have relevant losses in Paraná, Mato Grosso do Sul and parts of Goiás,” Santos said.

Yield potentials were hit in west and north Paraná as well as south Mato Grosso do Sul due to lack of rains during the crucial filling stage when corn kernels develop, AgRural analyst Adriano Gomes said.

“The second half of April was very dry and forecasts indicate these conditions will persist in May, leaving some regions on alert,” Gomes said.

Once an afterthought, second corn now accounts for roughly 70 percent of Brazil’s total output, helping the country compete with top producer United States in global markets.

In the second half of April, fields went through important stages of the development without enough water.

“Rainfall was considerably below normal levels for the period,” INTL FCStone analyst Ana Luiza Lodi said in a note.

The drought took a toll in Goiás, Mato Grosso do Sul and Paraná states, she wrote. Those three states are expected to produce a combined 32.5 million tonnes of corn this season, according to government data.

Reporting by Ana Mano and Roberto Samora; Editing by Susan Thomas

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