March 30, 2012

 

Argentina's 2011/12 soy output down due to drought

 

 

The Buenos Aires Grains Exchange said Thursday (Mar 29) that Argentina's 2011/12 soy output was estimated at 45 million tonnes, down from a previous forecast of 46.2 million tonnes, citing drought-related losses in the northern growing areas.

 

A dry spell at the height of the Southern Hemisphere summer in December and January cut into Argentina's crop yields. The country is the world's top exporter of soymeal, used as animal feed, and of soyoil, used for cooking and in bio fuels.

 

Most Argentine soy fields were replenished by rains in late January and February, but some marginal growing areas in the north have remained dry, the exchange said in its weekly report.

 

"Despite consistent rain forecasts in the northern province of Chaco, the showers necessary to interrupt the drought never arrived," said Esteban Copati, an analyst at the exchange.

 

"The losses have grown to amounts hard to compensate for, especially now considering the impact of the low temperatures in late-planted fields in an extensive part of the south," he said.

 

Chaco is Argentina's sixth-largest soy producing province. Most of the country's soy comes from the central Pampas grain belt, which includes most of Buenos Aires province and parts of Cordoba, Santa Fe and Entre Rios.
 

The South American country is the world's third-largest exporter of soy and its second-biggest corn supplier after the US.

 

The exchange kept its 2011/12 Argentine corn output projection unchanged at 20.8 million tonnes.

 

Hope at the start of the season for much bigger harvests - up to 30 million tonnes for corn and 53 million for soy - have been dashed by the drought.

 

The Agriculture Ministry last week pinpointed its 2011/12 corn estimate at 21.2 million tonnes versus its previous official estimated range of 20.5 million to 22.0 million tonnes.

 

Corn was hit harder than soy by the dry spell, due to its shorter and more delicate flowering period. The government expects Argentina to produce 44 million tonnes of soy this season.

 

As of Thursday, 5.4% of the 18.85 million hectares planted with soy this season had been collected. Farmers had meanwhile gathered 21.7% of their 2011/12 commercial use corn, planted on 3.9 million hectares.

 

The United Nations says demand for soy and corn-based animal feed is stronger than expected, as the fast-growing middle class of China deepens its new-found love affair with beef steaks. Chinese grains imports have remained strong despite the country's slowing economy.

 

Soy futures on the Chicago Board of Trade explored six-month highs earlier this week as concern over drought-hit South American supplies combined with solid demand to push prices up.