October 19, 2009
Argentine rains boost prospects for record soy crop
Rains that fell over Argentina's drought-stressed soy farms since early September restored moisture levels in time for planting, improving prospects for a record harvest that growers say may reach 53 million tonnes.
Soil conditions are so good that farmers will sow 19 million hectares with the oilseed, Rodolfo Rossi, the president of Argentina's soy producers association said. In late August, Buenos Aires Cereals Exchange President Ernesto Crinigan forecast a crop of 50 million tonnes.
Argentina, the world's third-biggest soy producer, reaped its largest-ever harvest of 47.5 million tonnes in 2006-07 from an area of 16 million hectares.
A bumper crop from Argentina, which ships 95 percent of its soy in the form of unprocessed grains, meal for animal food, edible oil and biofuel, "will have a large impact on markets," said Mario Balletto, a grain analyst for Citigroup Global Markets in Chicago.
Argentina's grains and oilseeds harvests were devastated last season by the driest weather in a century. Soy output fell to 32 million tonnes, almost 30-percent less than in 2007-08, according to the Agriculture Ministry.
Soy futures for November delivery fell 5.5 cents, or 0.6 percent, to US$9.77 a bushel October 16 on the Chicago Board of Trade. The price advanced 1.4 percent this week, after last week gaining 8.9 percent. The oilseed has gained about 8 percent in the past year and has declined 40 percent from a record US$16.36 on July 3, 2008.
Rains brought by El Nino, a weather pattern that forms in the Pacific and influences climates worldwide, began in September and have continued in October.
Cristian Russo, an agronomist at the Rosario Cereals Exchange said soy planting will be in full swing during the next two weeks.
Argentina's soy output quadrupled in the 10 years before the drought, as farmers switched away from corn, wheat, cattle and sunflower to feed growing global demand, especially from China. The area sown to corn this season will be the lowest since 1989, according to an October 14 estimate by the Buenos Aires exchange.
