The drought in the heart of Argentina's Pampas grains belt is expected to reduce corn yields and cut up to 3.7 million tonnes from the projected 2017/18 harvest, local analysts said on Wednesday. Argentina, the world's No. 3 corn exporter, has been hit by extremely dry weather that has slowed late season soy planting, raising fears that some fields will go unsown, while the Southern Hemisphere summer sun dries up corn yields in important farm areas.
Farmers only have another week to plant soy in order to harvest before frosts might hit in May and June. Argentina is also the world's third biggest soybean supplier.
"The problem with corn is not so much that of reduced planting area as it is the effect that the drought will have on yields," said Gustavo Lopez, head of local consultancy Agritrend, which expects a 2017/18 crop of 38.3 million tonnes, down from a previous estimate of 42 million tonnes. Lopez said he forecasts Argentina's exportable surplus will be 23.5 million tonnes, down from his pre-drought estimate of 27 million tonnes.
Argentina started 2017 with the opposite problem. Many areas had been flooded by excessive rains but long hot stretches of sunshine later in the year parched prime corn and soy areas in the northern part of bread-basket province Buenos Aires. Last week the Rosario grains exchange cut its corn crop estimate by 4 percent to 39.9 million tonnes.
The Pampas got rain over the weekend but the distribution of the showers was uneven, leaving many areas parched. Rosario exchange analyst Cristian Russo said this season's corn yields will be under the average of the last three years. "In the areas that were less fortunate in receiving the recent showers, the drought will continue," he said. The most optimistic analysts say harvest losses in drought-stricken areas could be offset by higher than expected yields in other regions.
"This could provide a cushion in terms of average yields," said Esteban Copati, chief analyst at the Buenos Aires Grain Exchange, which has so far stuck by a 2017/18 corn crop estimate of 41 million tonnes that it announced in September. If hot and dry conditions remain in Buenos Aires, however, the exchange could cut its harvest estimate next month. Pablo Adreani, head of local consultancy Agripac, has trimmed 2 million tonnes from his corn harvest estimate, to 38 million tonnes.
"There are areas that have been very much damaged by drought in December, with yield reductions of up to 50 percent," he said, adding that his current estimate could rise or fall depending on January and February rains. "Mid-February is when the overall picture is going to be defined with greater certainty, once the planting is finished," said Alberto Morelli, president of Argentine corn industry chamber Maizar.
Last season, Argentine farmers harvested 39 million tonnes of corn, according to the Buenos Aires exchange.
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