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Fading El Nino will boost Argentina crops

12/07/2012 @ 2:51pm

Argentina is on track for bumper crops this season, although quality will suffer and isolated areas will see output affected by the fading El Nino weather pattern, Buenos Aires Cereals exchange weather analyst Eduardo Sierra said in a report Friday.

Fields in Argentina, one of the world's top grain exporters, have been soaked by repeated and heavy showers over the past three months, slowing planting of the country's soybean and corn crops.

The heavy showers were blamed on the warming of equatorial pacific waters typical of El Nino. El Nino usually brings wet weather for key farm belts in South America.

While El Nino was in effect from July to September, it has largely dissipated, according to the U.S. Climate Prediction Center.

Despite the fading El Nino, affects are likely to be felt through the rest of Argentina's growing season through alternating periods of dryness and heavy showers, and wide swings from extreme heat to short, but intense cold snaps, Mr. Sierra said.

That will increase the presence of insects, weeds and crop diseases and complicate planting and harvesting, according to Mr. Sierra.

Despite the slow start to planting, Argentina's farmers are on track to shatter production records for both soybeans and corn this season, encouraged by high global prices and aided by the wet weather.

To date, farmers have seeded 54% of the 19.7 million hectares expected to go to soybeans this season, down 15 percentage points on the year, according to the exchange.

The U.S. department of Agriculture is expecting Argentina to grow a record 55 million metric tons of soybeans, up from the previous record of 52.7 million tons set during the 2009-10 season.

Argentina is the world's No. 3 soybean exporter behind Brazil and the U.S. and is the world's leading exporter of soyoil and soymeal. Global soybean markets are counting on bumper crops from South America this season to make up for the heavy drought losses suffered by the U.S. crop.

The wet conditions have also slowed corn planting in Argentina, the world's No. 2 corn exporter.

So far, 55% of the 3.4 million hectares expected to go to corn this season have been planted, down 14 percentage points on the year. Area is seen down 12% on the year.

Early on, expectations had been for a record 28 million tons of 2012-13 corn production, but output is now likely to be 26 million to 27 million tons because of the planting delay, according to the corn growers association Maizar.

That will still top Argentina's previous corn record of 24 million tons during the 2010-11 season and is up sharply from the 21 million tons harvested during the drought-ravaged 2011-12 season.

-Write to Shane Romig at shane.romig@dowjones.com.
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December 07, 2012 15:29 ET (20:29 GMT)
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