Dryness in Argentina reduces soya planting

Drought in Argentina's bread basket province of Buenos Aires has raised the risk that some of the 18.1 million hectares expected to be sown with soya this season will go unplanted, the Buenos Aires Grains Exchange and other analysts warned on Thursday. With planting season set to end over the weeks ahead, the exchange said 2.25 million hectares have yet to be sown.
"Our current national planting area estimate is at risk due to lack of soil moisture, and the impending closure of the sowing window in areas including central and southwest Buenos Aires and southern La Pampa provinces," the exchange said in its weekly crop report. "Lack of ground moisture in parts of Buenos Aires raises the risk that growers will not be able to plant soya in fields covered with last season's wheat and barley stubble," it said. The country is the world's top exporter of soyameal livestock feed and a big supplier of corn and raw soyabeans.
"Last season a total of 130 million tonnes of grains and oilseed were harvested in Argentina, 96 or 97 million tonnes of which were soya and corn. This season, if the drought continues, it could reduce the total to 118 to 120 million tonnes," said Gustavo Lopez, analyst with local consultancy Agritrend. The drought has helped to mitigate the downward pressure on the US soyabean and corn markets following a massive harvest of both crops in the US Midwest.
Although a bearish tone remains firmly in place over the futures markets, prices have been sensitive to any changes to the weather outlook in Argentina as any crop shortfalls there would likely add to export demand for US supplies. Since the end of November, Chicago Board of Trade soyabean futures have fallen 2.5 percent. CBOT corn is off just 1.3 percent during the same period.
Pablo Adreani, head of the Buenos Aires farm consultancy Agripac, said it was unlikely that Argentina's total grains and oilseed production would reach the 127 million tonnes projected by the Rosario grains exchange. "Our preliminary, conservative analysis of the losses suffered so far is for a 5 percent reduction in production, equivalent to 6.35 million tonnes, which would bring total 2017/18 production to 120 million tonnes," Adreani said. "As long as it does not rain the prices of corn and soyabeans will remain firm," Adreani added.