May 4, 2012

Argentina's 2011-12 soy production forecast down two million tonnes

Another two million tonnes were slashed from Argentina's 2011-12 soy production forecast by a leading Argentine grains exchange on Thursday (May 3) due to the impact of bad weather including a sharp drought that has battered yields.

The Buenos Aires Grains Exchange cut its forecast for the harvest in the world's No. three soy exporter to 41 million tonnes -- 17% below the previous year's crop of 49.2 million tonnes.

"As the harvest advances, average yields are falling short of initial expectations in much of the main agricultural area," the grains exchange said in its weekly crop report.

It held its forecast for corn production steady at 19.8 million tonnes. The South American country is the world's second-biggest supplier of corn after the US, and this season's crop was badly hit by the dry spell that parched soils in December and the first half of January.

When Argentine farmers started sowing soy, industry analysts estimated production of up to 53 million tonnes. But dryness related to the La Nina phenomenon has pushed forecasts down.

The grain exchange's first estimate for the soy harvest was 46.2 million tonnes and for corn 22 million tonnes, in late January, much later than estimates by government officials and the USDA.

Growers have harvested 64% of the area planted with soy, up eight percentage points from a week earlier, the exchange said.

Average yields are running at 2.36 tonnes per hectare but the exchange said it expected that to fall to 2.2 tonnes by the end of harvesting due to a series of climate problems including recent frosts in southern areas and excessive rains in parts of Buenos Aires province.

With regard to corn gathering, farmers have brought in crops from 44.7% of the area planted with commercial-use corn, up just 3.4 points from the prior week and lagging last year's pace by 7.5 points.