Rainfall boosts Argentina crops, eases drought fears
Argentina's dry fields got a respite this week, as scattered showers gave the developing soybean and corn crops a drink just in time to stem major crop losses.
More relief is also on the way, with weather forecasts calling for another wet week ahead.
Argentina is the world's top exporter of soymeal and soyoil and ranks third behind Brazil and the U.S for soybean exports. With Argentina's soy planting just finishing and the crops struggling with dry weather, global soy prices have found support recently over concerns about the crop's development.
The Buenos Aires Cereals Exchange said it estimates the crop will be Argentina's second-largest ever and up 25% on the year at 50 million metric tons. But before the dry snap started in January, analysts had expected production to top 55 million tons. The U.S. Department of Agriculture is forecasting a crop of 53 million tons from Argentina this season.
"The panorama isn't clear yet, but the rain was a relief in many areas and stopped the crop deterioration," said Buenos Aires Cereals Exchange chief agricultural analyst Esteban Copati. However, continued rainfall is needed to prevent new losses, Mr. Copati said.
Over the past week, rainfall of up to 50 millimeters soaked most of the fields in the northwestern areas, but many fields had already suffered damage from dryness, Mr. Copati said. However, fields in many parts of Buenos Aires province and the south of Cordoba are still dry, he added.
The rains were a big boost for the northeast, but the western areas still need more rain, said Francisco Mariani, analysts at farming consultants Terra Pampa.
Those showers and the wet conditions early in the season "are preventing the disaster of last season, but [soybean] production is likely to come in under 50 million tons," Mr. Mariani said. Argentina's crops were pummeled by drought last season.
Fortunately, a storm front is on the way, auguring abundant rainfall across the bulk of the farm belt over the next week, according to the Buenos Aires Exchange. The northern half of the farm belt is in store for heavy rainfall of 25 to 75 millimeters, with severe storms in isolated pockets, while the central and southern areas of the farm belt should enjoy 10 to 25 millimeters of rain, according to the exchange.
Despite the dry conditions in January, Argentina is expected to produce a record corn crop this season. Argentina is the world's No. 3 global corn exporter behind the U.S. and Brazil.
The Buenos Aires Exchange predicts 2012-2013 commercial corn production of 25 million metric tons, up from the 21.5 million grown during last year's drought-ravaged season. Planting is done.
According to the agriculture ministry, Argentina's previous corn record was 22.7 million tons in 2009-2010. However, the ministry's estimate also includes corn grown and used on individual farms, while the exchange counts only grain sold and traded.
The exchange's forecast is significantly lower than the USDA's, which forecast Argentina's 2012-2013 corn crop at 27 million tons.