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May 3, 2016

Wheat Acreage in Parana Continues to Decline

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

May is the main month for planting winter wheat in the state of Parana, which is Brazil's largest wheat producing state, but thus far only 3% of the intended wheat has been planted. The start of planting had been slowed in recent weeks due to dry weather during most of April. Rains finally moved across the state late last week and conditions are now more favorable for wheat planting.

The Department of Rural Economics for the state of Parana (Deral) again lowered their estimate for the 2016 wheat acreage in the state in their latest monthly report. They are now estimating that the wheat acreage will decline 14% compared to last year to 1.15 million hectares. In their March report, they estimated the wheat acreage would be down 11%. Deral is estimating the 2016 wheat crop in Parana will be 3.5 million tons, which is down from their last estimate of 3.6 million tons.

Farmers in southern Brazil have been reducing their wheat acreage in recent years due to low prices, adverse weather during harvesting, and increased cost of production. For the last two years, heavy rains during harvest have resulted in lower yields and poor quality grain. As a result, farmers have opted for more safrinha corn which offers much better returns especially this year due to the high corn prices in southern Brazil.