July 13, 2012

 

Argentina's soy harvest meets expected 39.9 million, down 20%

 

 

Argentina's 2011-12 soy harvested at expected 39.9 million tonnes, 20% down on-year after a sweeping Pampas dry spell, the Buenos Aires Grains Exchange said on Thursday (July 12).

 

Last year's soy harvest in Argentina, the world's top exporter of derivatives such as soyoil and soymeal, was 48.9 million tonnes, according to government data. The country's biggest soy crop ever was 53 million tonnes collected in 2009-10.

 

The Agriculture Ministry predicts 2011-12 soy output to be 40.3 million tonnes after a December-January drought dashed hopes for a bumper crop.

 

Corn harvest is 86% complete, but the exchange said the few remaining areas to be harvested were so ravaged by the six-week dry spell, followed by harvest-disrupting floods, that 39.9 million tonnes remains its final estimate.

 

"There are still some fields to be harvested in western, central and southeast Buenos Aires province (Argentina's No. 1 farm region)," the exchange said in its weekly crop report.

 

"This area amounts to about 25,000 hectares (62,000 acres) where productivity has been harshly reduced by various weather factors and delays in harvesting. The volume that can be collected in these areas is not significant and will not change accumulated national production," the report said.

 

The USDA forecast a 41 million-tonne soy harvest in Argentina this season.

 

The production drop comes as worries mount about US grain supplies.

 

What looks to be the worst US drought in a quarter of a century has sparked a commodity rally, with key grain prices hitting highs. The last time this happened was in 2010 when Russia suffered a massive crop failure. It caused food crises in vulnerable countries around the globe.

 

Traders said buyers in Europe, North Africa and the Middle East had pulled back on regular purchases, opting to wait for prices to cool off.

 

The United Nations expects global food demand to double by 2050 as world population hits 9 billion. Argentina, which boasts a fertile Pampas grain belt bigger than the size of France, will be the key to feed an increasingly hungry world.