Climate change reality has caught up with Argentina with mounting uncertainties about summer crops, since the sowing of soybeans and corn is already below 40% of last year, already diminished.
According to the Rosario Grain Exchange, corn and soybean planting at this time of the year has reached some six million hectares, 40% below last year and the lowest since the 2000/01 summer crops season.
Corn planting has been completed on 3,3 million hectares, 32% less that the intended area and the smallest area for this time of the year since the 2015/16 harvest. Likewise with the 2,8 million hectares planted of soybeans, the least area for mid November since the 2000/01 harvest.
Because of the delay caused by the absence of sufficient humidity in the soil, and little prospects of late rainfalls, the soybean potential in the region will be the lowest of the last 12 years since “76% of the summer soybeans in the core farming zone will be planted outside the period in which the maximum potential is obtained,” pointed out the Rosario Grain Exchange.
Besides recent rainfall in the Pampas region was notoriously insufficient, and the crop's yield potential will have to be adjusted downwards. With corn sowing limited, it is anticipated farmers could decide on replacing hectares with soybeans. But here also much will depend on rainfall and sufficient humidity in the soil.
A similar situation can be said of the winter crops, mainly wheat of which Argentina is a global leading exporter, but has seen its harvest estimate consistently lowered, again as a consequence of climate change an insufficient rainfall.
The situation is not only a challenge and a headache for the Argentine government strapped of much needed foreign currency, but also for the Brazilian mills, traditional clients of their Mercosur neighbor. In effect the Rosario Grain Exchange has forecast that the 2022/23 wheat crop will be below 11,8 million tons, with an insignificant surplus for exporting given the poor yields.
Productivity is expected to be the lowest in 15 years. It’s worth remembering that Argentina’s previous crop was a record-breaking 23 million tons. In Brazil, after weeks of decline, wheat prices on the over-the-counter market are again extremely bullish.