January 13, 2012

 

 

Recent rainfall may encourage Argentine farmers to plant second-crop soy, of which an unusually high 60% remained unsown, with many growers holding off because of dry weather.

 

While crops already in the ground were showing "severe stress", this too could be alleviated if rains improved, after the "excessive dryness" last month.

 

Most soy in north west Buenos Aires province, southern Cordoba and Santa Fe "are not yet flowering and could pull out of severe stress if the crop receives rainfall in January and February", USDA analyst Denise McWilliams said.

 

The comments are the first by the USDA since fears for South American dryness started in earnest, driving a rally in corn and soy prices from mid-December.

 

They follow a band of rain which offered, at least temporarily, drought relief to much of Argentina.

 

Nonetheless, the USDA cut by 1.5 million tonnes to 50.5 million tonnes its forecast for the 2011-12 Argentine soy crop, the world's third-biggest, halving the uplift it had expected from last season's harvest.

 

It also reduced by three million tonnes to 26 million tonnes its estimate for the Argentine corn harvest, citing "moisture stress" caused by temperatures above 38 degrees Celsius (100 degrees Fahrenheit) last month.

 

"About half of the early corn was entering the silking and tasselling stages the stages most susceptible to drought," McWilliams said.

 

She added that "some specialists suggest from four-to-seven inches of rain will be necessary to replenish soil moisture and relieve plant stress for continued crop progress", adding that some farmers in light soils were giving up on their crop, and using it for grazing or hay.

 

The USDA also lowered its estimate for the soy harvest in Brazil, by one million tonnes to 74 million tonnes, citing poor rainfall in southern areas in November and December.

 

"Below-average rainfall in the south during December reduced potential yields, especially in regions that were planted early where crop stage was in the critical flowering and pod-filling stages during December's drought."

 

However, it kept its estimate for the Brazilian corn harvest unchanged at 61 million tonnes.

 

The USDA also maintained at 7.6 million tonnes its forecast for the soy crop in Paraguay, which has also suffered dryness.