With January among the wetter months for Brazil, rains in the weeks ahead will be key to crop development. With Brazil’s growing role as an exporter of corn and soybeans, the trade will be watching the rains closely. Below-average rains have been observed and may continue for key Brazilian producer states of soybeans, like Mato Gross, Mato Grosso do Sul, and Goias in the midwest and Parana and Rio Grande do Sul in the south.
For corn, major producer states seeing drier weather include Mato Grosso, Mato Grosso do Sul, and Parana; other origin states like Minas Gerais and Bahia have seen more rains.
While India is poised to seize the spot as top sugar producer from Brazil as more Brazilian sugarcane is diverted to fuel ethanol manufacturing, Brazil will remain a key origin. Unfortunately, Brazilian cane is getting older, making it more susceptible to yield losses from poor weather. Based on current market conditions and government policy, the sugar share of cane use in Brazil may only see a modest recovery vs. ethanol.
Brazil, seven-day rainfall, percent of normal
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