November 23, 2009

Argentina soy crop may miss forecast on El Nino

Argentina soy output may fall short of a US Department of Agriculture (USDA) forecast because the El Nino weather pattern will trigger less rains than usual, a forecaster said.

Reduced El Nino rainfall in drought-stressed central Argentina means output in the coming crop may miss a November 10 USDA forecast for a record 53 million tonnes, said Paulo Etchichury, head of Sao Paulo-based weather forecaster Somar Meteorologia. Still, output will likely be higher than the previous record of 48.8 million tonnes harvested in 2007.

El Nino, a weather pattern that forms in the Pacific and influences climate worldwide, usually brings more rain to Argentina during the Southern Hemisphere summer. El Nino will be "weak" in December and January in Argentina's so-called Grain Belt region in the central provinces of Cordoba, San Luis and Santa Fe, Etchichury said.

Moisture is needed during sowing that runs from December through January for plants to develop properly.

Argentine production of the oilseed fell in the last two years due to dryness. Output decreased almost 30 percent in the last season to 32 million tonnes, when the nation was hit by the worst drought in a century, according to the Agriculture Ministry.

Soy for January delivery on the Chicago Board of Trade gained as much as 1.1 percent on Thursday (Nov 19) to US$10.50 a bushel, the highest for the most-active contract since August 13, on speculation that demand will be sustained from China, the world's largest buyer of the oilseed.