South American crop extremes
Of all the fundamentals weighing in on the corn and soybean markets lately, the one that's gotten most of the attention is how Mother Nature's behaved in the southern hemisphere, namely the areas of Brazil and Argentina that grow most of South America's soybeans and corn.
As farmers in those countries start to look ahead to harvest, which will begin in parts of South America in the next couple weeks, they're taking stock of where the weather's left their crop potential: Argentina's faced some tough drought conditions throughout the growing season, but recent rains have helped ease that drought pressure. A lot of farmers in Brazil, though, have had good weather lately, and are looking forward to a bumper crop.
Agriculture.com Marketing Talk member Santiago is a farmer in Argentina who's been dealt a tough hand with his crops this year. His farm in the Cordoba province in the center of the nation has missed out on many of the rains that have fallen there -- especially in the last 2 weeks -- and that's got him worried about his crop prospects as harvest looms.
"If we do not get any [rain this or] next week either, I can say that our soybeans will be in trouble," Santiago said in Marketing Talk this week.
On top of a lack of rainfall in much of his nation, Santiago says the weather's caused other issues, namely with disease. "I had to spray all my soybeans due to disease, and some farmers are doing it for the second time, which as you can imagine, the disease is mainly in dry seasons," he says.
Still, next week holds more chances for rain to fall on Santiago's Cordoba farm and he says he's "still optimistic about still more Argentine rainfall chances for the middle of next week, and the state of Cordoba would certainly be in the mix to get some of the best amounts from that system."
On the other hand, Santiago says "Brazilian weather concerns have been few and far between throughout this growing season and that looks to continue," echoing the reports from reporters like Gazeta do Povo's Luana Gomes. The crops are "doing great so far" in the southern state of Parana in Brazil, for example, Gomes said earlier this week.
"Overall, the situation is still good in the area, but there are a few dry spots, and a few others where crop diseases and pests are giving farmers a hard time," Gomes said of the Parana state in southern Brazil this week. "We shall see what happens there."
Looking ahead, the worst of the season's crop-stressing conditions may be behind South American farmers, says John Roach of Roach Ag Marketing, Ltd. That could affect how the U.S. grain futures markets perceive the influence of the South American crop moving forward.
"Argentina's corn and bean crops have been hurt by hot dry weather, but the worst of the weather seems to have, at least temporarily, passed," Roach says. "If their crop stabilizes, we will have seen the worst numbers a couple of weeks ago for South America and the question remaining will be soon be, can the estimates begin to increase."