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Argentina's Dry Weather Returns, Drops Soybean Estimate
BUENOS AIRES, Argentina- The Buenos Aires Cereal Exchange has dropped its Argentine soybean production estimate.
Farmers in Argentina are now expected to produce 51 million metric tons of soybeans, in 2018, below a September estimate of 54.0 million metric tons on a total planted area of 44.4 million acres.
In comparison, the USDA still has Argentina's 2018 soybean production estimated at 56 million metric tons.
In different regions of the country, the situation varies. Nearly 34.6% of the fields are considered by the Exchange to have a regular or bad condition, while 53% are under regular or dry prospects. Approximately 31.5% of the surface is at the stage that defines yields.
The short-term perspectives do not foresee any relief, in terms of weather. There was planting incorporation that still was not counted in this latest estimate by last week in the northern parts of the country.
The early planted fields have crops that are finishing the growth stages, awaiting the beginning of the harvest in the coming weeks.
For meteorologist José Luis Aiello from the Rosario Board of Trade, one of the reasons for the lower crop estimate is the lack of rainfall seen for the next 10 days, in the key producing regions. Even though planting has finished in the provinces of Buenos Aires, Santa Fe, and Córdoba the lack of rains can affect the crop development there.
“The distribution of high pressure centers of high pressure centers in the Pacific and the Atlantic generate a situation that will limit the water supply during at least 10 days in Argentina and the south of Brazil,” said Aiello.
Brazil Prepares For Corn Planting Season
Meanwhile, Brazil’s farmers are getting set to plant that country’s second corn crop, known locally as safrinha.
This corn crop is harvested in the winter of the Southern Hemisphere, the summer in the U.S.
As the planting is about to start, Brazil’s National Supply Company (Conab) estimates that the summer corn crop would be reduced in 9.6% on surface and 17.8% on output with 25.5 million metric tons. The surface planted in the summer was already the lowest since 1976/77. According to sources, this can generate consequences for Brazil’s agricultural chain.
Most analysts do not believe in the possibility of major imports of corn as it happened during the drought of Brazilian central states, but some cooperatives are anticipating purchases for feed meal with an 8% premium. Yet, imports in the Northeast and in the state of Santa Catarina, the largest hog and poultry producer, could happen sporadically.
Carlos Cogo, an experienced analyst from Porto Alegre, Rio Grande do Sul, has an early projection about the second corn crop with a reduction between 5% and 7% of the surface with a larger drop concentrated in Paraná. The states of Mato Grosso and Paraná plant 57% of the Brazilian second corn crop.
“Talking about scarcity now is non-sense”, said Cogo in an interview with Agriculture.com. “We still have high stocks, but there will be just normal scarcity in specific regions. There are surpluses and there are exports for new destinations like Egypt, Taiwan, and Indonesia,” he says.
According to Conab, Brazil will have 44.45 million metric tons available during the first half of the year with 76% of that output being consumed domestically. For Lucilio Alves, a researcher from the Center of Advanced Studies on Applied Economics of the University of São Paulo, this represents just the current market condition and not a long-term trend.
“In the central parts of the country, there are not many options other than planting corn over soybeans. And if all that soybean surface is used, Brazil could double the production right away,” explained Alves.
Representatives of the largest agricultural cooperative in Chapecó, Santa Catarina, CooperAlfa, said that they have not anticipated sales and would make big purchase decisions by February. Coopavel, the largest ag coop in the state of Paraná, reported to have offered barter options to guarantee a production 500,000 tons of feed meal for associate poultry and hog producers.
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