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Dry weather, heat and lack of rain threaten Mercosur soybean crop

Wednesday, January 4th 2012 - 06:26 UTC
Full article 19 comments
Rain still on time for Argentina’s soybeans and corn Rain still on time for Argentina’s soybeans and corn

Mercosur soybean production is expected to fall 2.9% after dry weather and heat damaged crops in Brazil and Paraguay and as conditions deteriorate in Argentina, Hamburg-based industry researcher Oil World said.

Total output for Brazil, Argentina, Paraguay, Uruguay and Bolivia will slide to 132.7 million metric tons in 2011-12 from 136.7 million tons a year earlier, 4.3 million tons less than forecast in December, Oil World wrote in an e-mailed report.

Soybean futures rose 6.8% in Chicago trading in December, the oilseed’s best monthly performance since August, amid concern dry weather will curb soybean crops in Brazil and Argentina, the largest exporters behind the US

“Favorable rainfall would still result in a recovery of soybean and corn-crop prospects in Argentina,” Oil World wrote. “Maturation is well advanced in most Brazil and Paraguay, where the crops already suffered irreversible damage.”

The soybean crop in Brazil will probably drop to 71 million tons from 75.3 million tons in 2010-11, Oil World said, cutting its forecast by 1.8 million tons. Paraguay’s production will fall to 7 million tons from 8.37 million tons, the researcher said, lowering its outlook by 1.5 million tons.

“In some parts of Brazil the corn and soybean crops are almost mature, so that rainfall from now on will partly be too late and probably even detrimental for harvesting,” Oil World said. “The same is true for Paraguay.”

The researcher said Brazilian soybean production may turn out to be 1 million to 2 million tons below its forecast, while Paraguay’s harvest may also come in lower than its estimate.

Argentina’s soybean harvest is forecast to rise to 51 million tons from 49.4 million tons a year earlier, Oil World said, cutting its outlook by 1 million tons. The outlook requires “above-normal” rainfall soon, the researcher said.

“In Argentina rainfall in January and February would still be very beneficial,” Oil World said. “There are significant moisture deficits in most parts of Argentina and there is a high risk that the required rainfall does not arrive in time to prevent additional irreversible damage.”

Parts of Argentina and south Brazil were forecast to have dry and hot weather early this week, causing crop stress for corn and soybeans, AccuWeather Inc. said in a Dec. 30 report

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  • GeoffWard2

    Ah, the ups and downs of export revenues tied to the weather and world price fluctuations!

    Still, this is the southern hemisphere production cycle, which is out of phase with the northern production cycle, so there should be higher unit prices for smaller crops - assuming that the northern hemisphere US production has not resulted in vast silos of stored soya.

    Bigger percentage change to the Uruguay import/export balance, unless some corrective (eg) import reduction ensues.
    Smaller changes to Brasil,
    and perhaps no impact on Argentina's - as long as it rains!

    Jan 04th, 2012 - 12:10 pm 0
  • Sir Rodderick Bodkin

    That'll teach the argentine paisano not to be a greedy little prick.
    I'm glad for it, and i really hope it doesn't rain anymore, would love to see this country becoming a desert.
    I can see the pain in the faces of most gauchitos here where i live which is a city located in a rural area.. We haven't had rains for a month.

    Jan 04th, 2012 - 12:56 pm 0
  • O gara

    What a sad bastard you must be Roddy living in the middle of people you intensely dislike.I know a few clowns like you never happy wherever you are.You couldnt hack it at home and after a few weeks in your new country the locals copped you on and you became even more embittered.
    Yhea there wouldnt be many in the World who would like to be you!!!!!

    Jan 04th, 2012 - 01:14 pm 0
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