November 16, 2009

With the El Niño weather system building, heavy rainfall has already coated the south of Brazil and Uruguay and is moving south to soak most of Argentina's farm belt.

But the showers aren't likely to make it to the drought-stricken southwestern fringes in time for planting there.

That bodes well for the record soy crop Argentina is currently planting, but will leave farmers hung out to dry in the western parts of Buenos Aires, Cordoba and La Pampa provinces, said the chief climatologist for the Buenos Aires Cereals Exchange, Eduardo Sierra.

Conditions are dire in those areas, with the fourth straight year of dry conditions leading to desertification as topsoil is carried away by the wind.

However, its a very different story across the Pampas, Argentina's traditional farm belt. Conditions are good there, with a lashing of storms over the next two weeks expected to soak fields and facilitate planting of the late soy.

As of Wednesday (November 11), farmers had planted 34 percent of the record 19 million hectares seen going to soy this season, according to the Buenos Aires exchange. The severity of the drought in the west has raised concerns that not all of the forecast area will actually be planted, but those worries are unfounded, Sierra said.

A decrease in corn and sunflower seed area due to the late arrival of spring showers will be taken up by soy, and the exchange is currently considering raising its forecast for soy area, Sierra said. The exchange's crop report is the leading local forecast for production, particularly since the government stopped publishing estimates last year.

While it's very early for predicting output, Sierra said that conservative estimates range between 48 million and 50 million tonnes, compared with the previous record of 47.5 million tonnes grown in 2006-07.

The El Niño phenomenon, a warming of surface temperatures in the Pacific Ocean off South America, is already in place and building in intensity. Farmers in the Pampas are banking on the increased rainfall that comes with El Niño to spur excellent crop development.

Some analysts are talking about a crop of as much as 55 million tonnes. But the greater reliance on late soy will limit potential yields so some degree, Sierra said.