December 17, 2010

Argentine soy forecast adjusted due to La Nina

Continuous dry weather in Argentina has caused Oil World analysts to abandon their sanguine position on the country's soy crop.

They also gave a warning of rapid deterioration and decreased their production forecast.

Two weeks ago, the analysis group said that the dry start to Argentina's main soy season was not yet alarming but now, it warned that a continued lack of rainfall was taking its toll.

"Argentine soy crop prospects are now deteriorating at a rapid pace," Oil World said. "It is still much too dry in the major Argentine soy and corn belt."

The group decreased its forecast for the crop in the world's third-ranked soy exporter by 1.5 million tonnes to 50.5 million tonnes, and warned that further downgrades may take place if there is no rainfall.

Meanwhile, a crop at the forecast level would represent a drop of 3.9 million tonnes year on year, and is lower than the 52 million tonnes estimate outlined on Friday (Dec 10) by the USDA, whose data set global benchmarks.

However, the downgrade comes amid growing fears for the impact that may be caused by the current La Nina weather pattern, which has a history of bringing dryness to Argentina.

Argentina's Rosario grains exchange last month broke ranks with other forecasters by estimating a crop of 49.5 million tonnes despite a rise in sowings to a record 18.7 million hectares.