March 11, 2021
Argentina cuts down its soy crop estimates due to drought, further cuts expected
A major drought in Argentina has affected soy crops in key parts of the country's farm belt, resulting in the Rosario Grains Exchange cutting down its 2020/2021 soy crop harvest estimate by 4 million tonnes to 45 million tonnes, Reuters reported.
Analysts said there will be more harvest forecast reductions coming soon.
The Rosario Grains Exchange said there were no significant rains in February and the first 10 days of March in the central farm area, resulting in losses to yields and planted area.
The Buenos Aires Grains Exchange said last week that it will cut its crop estimates of 46 million tonnes a piece for soy and corn if no significant rains occurred
Esteban Copati, a top analyst for the Buenos Aires Grains Exchange, said in areas where crops are in critical reproductive stages, there are massive ground moisture losses.
He said soy planted early are losing yields and soy planted late is not only losing yield but also losing areas that can be harvested, with key corn farming areas affected too.
Carlos Achetoni, head of the Argentine Agrarian Federation (FAA), a farmers' group, said the most badly affected areas are Buenos Aires, Santa Fe, Entre Rios, Chaco and Formosa provinces.
Lower than projected Argentine soy crop could increase concerns over low global supplies of soybean that have pushed prices for the oilseed to near seven-year highs.
Isaac Hankes, a US-based weather analyst at Refinitiv, the financial and risk business of Thomson Reuters, said there have been recent rains but it was insufficient to turn conditions favourable. Hankes said there are hints of rainfall for some models but they see the most likely outcome to be dryness persisting until mid-March.
Analysts said the season mirrors the drought-hit year of 2018. German Heinzenknecht, a meteorologist with local consultancy Applied Climatology, said however, this year may be better than 2018 for soy and corn but wheat and barley sowing could be very complicated if the weather does not change.
Argentina is the biggest soymeal livestock feed exporter in the world and the third biggest corn supplier globally.