South America Calling
Alastair Stewart South America Correspondent

Tuesday 01/29/13

Argentina's Weather Conundrum

Assigning appropriate weight to the factors influencing this year's Argentine soybean and corn crops is difficult.

First of all, you had the epically wet weather of the first months of the 2012-13 season, which waterlogged fields and delayed planting across much of the prime planting area, known in Argentina as the nucleus.

According to CREA, a respected local farm group, some 28% of soybeans and 16% of corn was planted late because of the rain, with the average delay being 19 days. Moreover, the weather prompted 6.7% of soybean fields to be replanted or abandoned.

As a result, large tracts of soybeans were only planted in December and January across the pampas, in theory restricting their productive potential.

But then the rain abruptly stopped and a two-month dry spell began. To start with, farmers embraced the change in weather as it created great planting conditions in December, but their joy turned to angst in January as consistent rain failed to return. Fast-forward to Jan. 29 and many crops have not seen decent rain for 30 days, creating hostile conditions for beans and corn that are entering key stages of development.

A cold front is expected to come up from the south this week, bringing scattered showers to many key producing regions between Wednesday and Friday. But this will not resolve the water deficit.

However, meteorologists are hopeful that this front will help shift the high pressure system that has been repelling rain clouds and February will be wetter.

So, a worrying situation, but one that has not generated any real losses if recent forecasts are to be believed.

Last Thursday, the Rosario Cereals Exchange maintained its soybean crop forecast at 53 million metric tons (mmt), noting that the soybeans are still generally in 'good to very good condition,' although further rain is fundamental to the crops' continued health. For the same reasons, it raised its corn forecast from 24 mmt to 26.5 mmt.

Those numbers are still lower than the U.S. Department of Agriculture's forecast of 54 mmt for soybeans and 28 mmt for corn.

Both soybean and corn planting are over 97% complete.

The conclusion that we can draw from this complicated scenario is that farmers have seemingly negotiated this problematic year without sustaining heavy losses yet.

But rain has to return over the next 15 days or soy and corn will start to wilt. It does seem to be crunch time.


Posted at 12:20PM CST 01/29/13 by Alastair Stewart
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