Drought Still Grips Western Argentina

Whilst rains have brought some relief to the eastern half of the Argentine grain belt, a drought about to enter it's second year still grips the west of the region.

"In early November drought was considered serious (grave) in Central Cordoba and western Buenos Aires, key growing areas for corn and soybeans," says Gail Martell of Martell Crop Projections.

"The November 11-17 rainfall forecast calls for the same anomalous weather pattern to persist, wet in South Brazil and dry in Argentina's southwestern grain belt," she adds.

Read her full story here, which highlights the problem areas, and compare that to the major soybean growing regions here.

The drought has intensified during the past few weeks, preventing timely plantings and creating unfavourable conditions for germination, say Oil World.

"There is a high risk that the required rainfall does not occur everywhere before the planting window closes. Argentine crop losses could be extreme if the situation does not improve within the next 3-6 weeks," they said.

Oil World recently cut their estimate for Argy soybean production in 2010 to 50 MMT from 52 MMT adding that seed quality "could become a serious problem, reducing yields below potential."

US officials in Buenos Aires last month also warned that so-called "brown bag" seeds – those saved by farmers from harvest as is common practice in Argentina – would "likely have lower germination rates".

Funnily enough this time last year we were also expecting an Argy soybean crop of 50 MMT, before the drought ultimately wiped 18 MMT off the board, and also badly affected soybean quality.