South American corn and soy damage seen as irreversible

Drought damage on corn and soy crops in parts of Brazil and Argentina are irreversible, according to forecaster Somar Meteorologia.

The dry weather came at a vital growing period of the corn and soy crops, said Paulo Etchichury, head of Sao Paulo-based Somar Meteorologia.

Corn was severely damaged and the losses are irreversible, while some strains of soy have a similar cycle and also would not be able to recover, said Etchichury.

Rain forecast for the region will be too late to reverse the damage done to corn and some soy crops, he said.

Brazil and Argentina are the largest exporters of corn and soy after the US, and analysts have reduced the production outlook for the two countries because of the drought.

Brazil's soil is less fertile and retains less moisture than in Argentina, therefore crops are more sensitive to dryness after surging fertiliser prices and the credit crunch led farmers to reduce the use of fertilisers, Etchichury said.

Brazil and Argentina may lose as much as a combined 10 million tonnes of corn to the drought, said Eduardo Tang from commodities brokerage Terra Futuros.

Brazilian corn farmers may harvest about 47 million tonnes of corn due to the dryness, compared with 55 million tonnes expected before the drought, Tang said. Argentina's corn output will be 16 million tonnes, down from an earlier forecast of 18 million, Tang said.

The damage to some southern Brazilian soy crops could not be reversed as they require rains at the same time as corn and did not get sufficient fertiliser during the dry spell, Etchichury said, adding that 2 million tonnes of the oilseed have already been lost because of the dry weather.