Argy Crops Looking Poor

Anecdotal reports from Argentina suggest that the early season drought and lack of inputs from cash-strapped farmers have had an adverse affect on yields this season.

The soybean crop is said to be around 35% harvested, with crops in many areas suffering from low yields and poor quality. Harvested pace is well ahead of a year ago levels of 22% which is indicative of how much of a problem dryness has been. The recent wheat crop was brought in well ahead of schedule, but almost 50% down, due to persistent drought.

Most analysts now think that the national soybean crop will do well to make 40 MMT, down from early season hopes of 50 MMT. The USDA last week lopped 4 MMT of their production estimate, dropping to 39 MMT. That would represent a drop of 15.5% on last year's production of 46.2 MMT.

Still, controversy continues to surround a secretive government who "pulled" their most recent crop estimate of 37-39 MMT without giving much explanation, apart from the fact that the report "contained errors".

Some media reports in Argentina are suggesting that final output could in fact be nearer to 35 MMT, but that the Kirchner administration is deliberately suppressing such news.

The corn harvest is also running well ahead of last year, also due to persistent dryness, with 44% of the crop done, 11 points ahead of last year. Low fertiliser usage has cut yields sharply in some areas, analysts report. Final production is estimated around 13 MMT, some 36% down on 2008.

Meanwhile the sunflower harvest is just about wrapped up and is estimated to produced just 2.45 MMT by the Agricultural Secretariat, 47% down on last year's crop of 4.65 MMT.

Meanwhile the entire Grain Belt from Córdoba to Buenos Aires remains critically dry, say StormX. It has been 10 days since the last measurable rainfall for much of the region. Furthermore, before the early April rains, a dry stretch lasting more than three weeks dominated the month of March. Over the next 7 days, there are no signs of rain outside of an isolated shower during the upcoming weekend, they add. This spells serious trouble for the Argentina soybeans, which continue to experience premature ripening, thereby reducing production numbers, they conclude.

We have to ask ourselves what would the situation be like if we hadn't have had February's "drought busting" rains?

And things aren't much better in southern Brazil, warn StormX. In the southern states of Parana and Rio Grande do Sul, dry conditions have gripped the area since early to mid-March, they say. The combination of drought-like conditions with above normal temperatures is threatening soybean production in the region. While over 75% of soybeans have been harvested in Parana, Rio Grande do Sul is only at 25%. The latest USDA soybean production forecast left Brazil unchanged at 57 million metric tons, but that number may be reduced as another week of extreme dryness is in store for the nation’s second and third largest soybean producers, they say.

That ties in with other reports I have been reading, suggesting that poor yields in the south will ultimately trim 2-3 MMT off current official estimates.