News
05.11.2009
Lack of rain dogs soy in Argentina for second year
A lack of rainfall is beginning to erode Argentina's soybean prospects for a second season, with analysts at Oil World citing "unfavourably dry conditions" for a 2m-tonne cut to their harvest forecasts.
Some important growing regions had a fraction of their normal rainfall last month, with Santa Fe receiving half its average rain, Cordoba getting 31% and La Pampa in central Argentina recording only 16% of what it had expected.
"Soybean crop prospects have deteriorated due to unfavourably dry conditions in several parts of the country," German-based Oil World said, cutting its forecast for Argentine production to 20m tonnes.
Dry weather, along with a switch to soybeans to cash in on a bouyant market, has already been blamed for a drop in wheat sowings to their lowest for a century.
Seed concerns
Expectations are being further dented by the low quality of seed, a reflection in part of last season's drought, which cut Argentine soybean production by a third.
"[Seed quality] could become a serious problem, reducing yields below potential," Oil World said.
The comments echo those of a report from US staff in Buenos Aires last month which warned that so-called "brown bag" seeds – those saved by farmers from harvest as is common practice in Argentina – would "likely have lower germination rates".
Despite the seed concerns, Argentine farmers are believed to have raised plantings by 7% to 19m hectares, according to the Buenos Aires Grain Exchange.
Brazil ahead
Oil World's revised forecast of a 50m-tonne crop would still put Argentina on course for a record harvest in 2009-10, beating the previous record of 47.2m tonnes set in 2006-07.
However, it is lower than many other forecasts, including those from the US Department of Agriculture, which has pegged the crop at 52.5m tonnes.
South American harvests are being keenly watched in Chicago, where the prospect of large Argentine and Brazilian supplies coming on line early in 2010 viewed as a big threat to prices, which remain above $10 a bushel.
Oil World has pegged Brazil's crop at 63.0m tonnes, up 5.4m tonnes year on year.
Celeres, the Brazilian farm consultancy which has estimated the crop at 64.6m tonnes, said in a report on Tuesday that farmers had completed 35% of plantings, compared with an average of 21% by early November.
Agrimoney
