April 24, 2009
Argentine soy harvest seen to fall below gloomy forecasts
Argentina's drought-hit soy harvest could fall below 35 million tonnes, even smaller than gloomy forecasts published by grains exchanges and international analysts over the past week.
Average yields in Argentina, one of the world's top soy exporters, are falling as the harvest advances and have helped push US soy futures to six-month highs in recent days amid strong demand from China, the world's biggest soy importer.
Four analysts at Argentine grains brokerages and consulting firms estimated the 2008-09 harvest at between 32 million tonnes and 37 million tonnes - way down from last season's healthy harvest of 46.2 million tonnes.
The Buenos Aires Grains Exchange slashed its production outlook to 36.2 million tonnes this week, but many local analysts say even that looks optimistic as farmers report plunging yields as a result of the drought damage.
Months of dry weather devastated Argentina's wheat and corn crops, but rains in February had raised hopes that soy would recover, but dry, hot weather returned in March and late-seeded crops have suffered.
Buenos Aires-based AgriPac consulting firm director Pablo Adreani said that due to drought and high temperatures, plants did not produce enough flowers for yields to be normal.
Rosario-based grains brokerage Guardatti Torti expects a slightly bigger crop of 33.5 million tonnes, as the rains have not favoured the crops and late-seeded soy failed just like the early soy, and in many areas it did even worse.
Ricardo Baccarin, from the Panagricola consultancy, said he saw final production at between 34 million and 35 million tonnes.
Another Argentine analyst, Diego de la Puente at the Novitas consulting firm, said farmers would likely bring in between 35 million and 37 million tonnes.
Soy accounted for almost a quarter of Argentine export earnings last year, and a sharp fall in production will hit state coffers due to lower income from export taxes.
The Argentine government which is also the world's top supplier of soymeal and soyoil has not yet forecast the current crop, while the US Department of Agriculture, sees Argentine farmers gathering 39 million tonnes of soy.
