CBOT front month corn futures hit their highest level in nearly eight years Wednesday as dry weather continues to threaten Brazil’s big corn crop. So far this month, a dramatic slump in projected yield, according to Gro’s Brazil Corn Yield Forecast Model, has wiped several million tonnes from Brazil’s estimated corn production for the year.
As we mentioned in our note on March 26, our models indicated by mid-March that corn yields and production were almost certainly going to drop. Front month corn futures prices have risen nearly 40% since mid-March.
Brazil is the world’s No. 2 exporter of corn. This year’s late planting of the second, or safrinha, corn crop is now pushing the crop’s critical pollination stage into the annual dry period, exposing the crop to heightened weather risks. Gro’s Drought Index shows the extent of the dry conditions in Brazil’s main corn-growing regions, while Gro’s forecast models show little relief in sight for the dryness.
The safrinha crop accounts for 76% of Brazil’s total corn production and bridges the gap in global exports ahead of the US harvest in September. Declines in Brazilian corn production would be bullish for US corn exports, and would place even greater importance on US new-crop corn production.
Weather will be the primary focus of corn futures trading over the next few months. Gro’s Explorer App, available with a Gro Premium subscription, has a weather feature that shows the daily GFS precipitation and temperature forecast change for every district around the world. Being able to visualize these changes in the Gro Explorer App offers greater clarity as forecasts shift day by day, and can be particularly useful during volatile weather conditions.
Follow Gro’s Brazil Corn Yield Forecast Model for daily updates of corn yield estimates at the district, province, and national levels. Meanwhile, Gro’s Drought Index and weather forecast models can help anticipate changes in growing conditions.
This insight was powered by the Gro platform, which enables better and faster decisions about factors affecting the entire global agricultural ecosystem. Gro organizes over 40,000 datasets from sources around the world into a unified ontology, which allows users to derive valuable insights such as this one. You can explore the data available on Gro with a free account, or please get in touch if you would like to learn more about a specific crop, region, or business issue.