Frosts hit agricultural areas in Brazil and Paraguay

SAO PAULO (Reuters) -Frosts hit agricultural regions of Brazilian states like Paraná and Mato Grosso do Sul on Tuesday, signaling further potential losses for corn crops and stalling the domestic market for the grain, a key ingredient of livestock feed.

In a note to clients, weather consultancy Rural Clima said cold weather would continue on Wednesday.

In neighboring Paraguay, which has been exporting corn to Brazil to make up for scarce supplies, frosts were “harsh,” said meterorologist Marco Antonio dos Santos.

However, rain in some areas reduced the damage, especially in northern Paraná.

Paulo Molinari, an analyst with Safras & Mercado, forecast more losses for Brazil’s second corn crop after the cold front hit. The region including Paraná, Mato Grosso do Sul and also Paraguay is in for another frosty Wednesday, he said.

Molinari said it was too soon to know how big the losses could be.

“I can’t say yet, as it just happened,” Molinari told Reuters. “Some fields, depending on how bad the frost is tonight, face the prospect of losing 100%.”

Bad weather has also paralyzed Brazil’s domestic corn market, with no sales from farmers due to uncertainty regarding production, said Molinari.

“Everyone is panicking about the issue of frosts,” Molinari said, adding buyers and sellers are waiting in the wings.

After a drought hit important corn areas of Brazil this year, Safras & Mercado pegged the country’s second corn production at 61.6 million tonnes, 22.4 million tonnes less than the initial projection.

Paraná, Brazil’s second largest corn state after Mato Grosso, was one of the most affected.

The second corn crop in Parana, which is planted after soybeans are harvested, was estimated at 9.8 million tonnes by a regional forecaster, some 5 million tonnes smaller than initially thought because of the drought.

Reporting by Roberto SamoraWriting by Tatiana Bautzer and Ana Mano; Editing by Louise Heavens and Bill Berkrot