September 18, 2020

 

Argentinian farmers deliberate between soy and corn for upcoming planting season

 

Argentinian farmers are projected to grow soy because of its high prices, but the dry weather has driven some farmers on the Pampas grains belt to choose late-season corn that are attractively priced too, Reuters reported.

 

Late in the year, corn and soy compete for planting area in Argentina.

 

Soy is Argentina's main cash crop, with the country being the biggest exporter of soymeal livestock feed in the world.

 

Corn is usually planted in September and soy in October. But farmers may wait to plant corn in November or December to benefit from increased rainfall expected at the end of the year.

 

Dryness has been a problem for Argentina's wheat crops in the past few months, with farmers becoming risk-adverse as they decide between growing corn or soy.

 

Esteban Copati, lead analyst at the Buenos Aires Grains Exchange, said farmers are diversifying instead of focusing on soybeans, with a strong inclination towards late-season corn planting.

 

Brazilian farmers on the other hand, are pushing hard for soy planting.

 

Soy prices have reached US$10 globally in September, its highest in two years caused by lower than expected soybean crushing in the United States. This could benefit Argentinian farmers.

 

The Rosario grains exchange projects soy will cover 17.3 million hectares for the 2020 / 2021 season, only 100,000 hectares more compared to the previous crop year. Estimated harvest is 50 million tonnes.

 

Emilce Terre, chief economist at the Rosario exchange, said corn is having a good season, limiting the transition to soybeans. The recent rising corn prices has meant less conversion to soy.

 

The Argentinian MatbaRofex futures market saw an April 2021 reference contract for corn going up 33% since April to US$160 per tonne. The May 2021 reference contract for soybeans has also increased about 14% since March to US$254 per tonne.

 

Argentina's soils have benefitted from crop rotation after years of soybean domination. The Buenos Aires exchange is expected to publish its 2020 / 2021 soybean planting projections next week. The exchange forecasts 6.2 million hectares of 2020 / 2021 corn.

 

German Heinzenknecht, an Argentinian meteorologist, said the poor rainfall scenario will continue to dominate throughout September, but October could see more rain.

 

But Heizenknecht said the La Nina climate phenomenon that brings dryness to Argentina may become a concern for the remainder this year.

 

Farmers are concerned about the weather as well. Eduardo Bell, a farmer in Saladillo town, Buenos Aires province, said prices will increase as China's demand grows, but La Nina continues to be a worry.

 

-      Reuters