Chronicle: Corn and soybean yields in Argentina are already at risk with low rainfall forecasts


NAPERVILLE, Illinois, Oct 4 (Reuters) – Argentina’s grain belt is having its driest calendar year in nearly a decade and forecasts hold that trend for the next three months, when the country’s corn and soybeans could have the no more rain needed.

Although the sensitive periods of yield formation are in the early months of 2023, harvest results have a slightly higher correlation with rainfall between October and December, when corn and soybean planting is underway.

Argentina’s corn crop was planted at 12% last Thursday, the slowest on that date in at least five years, according to its agriculture ministry. But past data suggests that corn yields are not negatively affected by planting delays, which are never historically significant, anyway.

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The same is true for soybean yields and the rate of seeding, which will not accelerate until November. However, drought during the planting period may reduce the total area, as was likely the case for the current wheat crop in Argentina.

Farmers in Argentina are expected to favor planting soybeans over corn this year due to better profit potential, but much lower than normal soil moisture and a dry outlook could threaten those plans.

Drought during corn and soybean planting is more likely during La Nina, which is expected to persist through early 2023, its third consecutive year. If it doesn’t start dying off in advance, this cooler phase of the equatorial Pacific Ocean can limit rainfall as Argentina’s groynes and pods fill.

La Nina has limited crop yields in Argentina over the past two seasons, especially the most recent. That held back supplies from the world’s No.3 exporter until last month, when the government, in need of generating revenue, used monetary incentives to force soybean sales.

end of year accent

The fact that October to December is dry in Argentina is not necessarily related to the precipitation trends of the previous months, and a dry October does not guarantee a dry November, etc. But insufficient rains during this period bode ill for yields, potentially more than in February or March.

Over the past quarter century, the nine driest October-December months in Argentina have occurred when La Nina was also present in the period. Yields of soybeans and corn have ranged from slightly below average to terrible over the nine years.

Corn and soybean yields in Argentina versus seasonal rainfall

Heavy year-end rainfall has preceded low yields only once in recent memory, during the 2013 harvest, but that was only because the first two months of the calendar year were marked by a near-record drought, only overcome by the disastrous 2018 season.

Rainfall between January and March is always very important for yields, but somewhat drier weather during this period may be more tolerable if there was sufficient moisture at planting time and immediately after.

Argentina’s national weather service last week predicted drier and warmer than normal weather to dominate crop areas for the next three months, usually a safe bet during La Nina. Extreme to exceptional drought, the highest drought classifications, has spread to the southern growing regions of the country.

Tuesday’s weather models showed chances of rain for key areas over the next two weeks, most in the often unreliable 12-15 day period. Even if the U.S. model for Tuesday noon is correct, Argentina’s grain belt would still have only a third of this month’s average rainfall as of October 19.

Last month was the driest September in Argentina’s grain belt since 2006, bringing the nine-month year-to-date rainfall to the lowest since 2013, around 23% below the decade average .

Monthly precipitation in the Argentine grain belt

Karen Braun is a market analyst for Reuters. The opinions expressed above are his own.

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Editing by Matthew Lewis

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The opinions expressed are those of the author. They do not reflect the views of Reuters News, which is committed to integrity, independence and non-partisanship by principles of trust.

Karen Brown

Thomson Reuters

As a columnist for Reuters, Karen focuses on all aspects of global agriculture markets, focusing primarily on grains and oilseeds. Karen comes from a strong scientific background and has a passion for data, statistics and charts, and she uses them to add context to any hot topic that drives the markets. Karen holds degrees in meteorology and sometimes showcases this expertise in her columns. Follow her on Twitter @kannbwx for her market insights.


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