Dry weather expected to keep pressuring Argentine soy, corn yields

BUENOS AIRES: Grains powerhouse Argentina is suffering a rainfall deficit of 150 to 30 milimeters with forecasts promising less moisture than necessary to fully refresh parched soy and corn fields, weather experts said on Tuesday as worry persisted about yield losses.

Months of hot, dry weather have put the country's two main cash crops at risk. Argentina is the No. 3 international corn supplier and the world's top exporter of soymeal livestock feed used to fatten hogs and poultry from Europe to Southeast Asia.

The Rosario grains exchange has estimated Argentina's 2020/21 corn crop will be 48 million tonnes. But the dryness has not that target at risk, according to Federico Di Yenno, a senior analyst with the Rosario grains exchange.

"With these weather conditions it is difficult to continue to assume that yield development will be normal, resulting in a corn crop of 48 million tonnes," Di Yenno said.

The exchange expects a soybean crop of 50 million tonnes this year, although soy yields are expected to be affected by dryness as well. Argentine soy harvesting starts in March while corn starts being collected in April.

In the last two weeks, above normal temperatures and insufficient rainfall worsened the soil moisture profile in many parts of Argentina's main farm belt, according to Di Yenno.

"In the next 15 days the critical period of corn crop development begins, so an accumulated 120 to 140 milimeters of rain is needed for optimal development," Di Yenno said.

"The weather forecast is not encouraging since the accumulated rainfall for the next 15 days does not exceed 60 milimeters in the region that needs the most water," he added.

In the next few days regional rains will hit some croplands around the bread-basket province of Buenos Aires, and those rains will expand to other areas through the 10-day forecast, said US-based Isaac Hankes, a weather analyst at Refinitiv, the financial and risk business of Thomson Reuters.

"However, some central regions (La Pampa through Cordoba/Santa Fe) will remain drier than normal. Beyond 10 days, there are indications for at least moderate rainfall potential," Hankes said.

"While some negative dryness impacts will persist regionally, it does not look like a scenario of widespread Argentine drought in January," Hankes added.

Local farm analyst Pablo Adreani, of the Buenos Aires-based AgriPAC consultancy, was less optimistic.

"The situation in Argentina is very dramatic. There are forecasts showing dryness persisting through January," he said.

"If it does not rain in abundance and over wide areas, the situaton will get more and more critical, causing crop loses for both corn and soy," Adreani added.