Apr 22, 2016

Grain Exchange in Argentina lowers Soy Crop 4 mt to 56 Million

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Farmers in eastern and northern Argentina had been expecting a very good soybean crop until several weeks ago. The weather during the entire 2015/16 growing season was nearly ideal and as the crop was approaching maturity, it looked like there would be record soybean yields in much of the country.

Then the rain started to fall and they continued falling for several weeks. As a result, widespread areas in the provinces of Entre Rios, Santa Fe, Chaco, and Corrientes in eastern and northern Argentina experienced extensive flooding. In some of the hardest hit areas, it was estimated that as much as 60% of the farmland was under water. This region of Argentina is very flat with almost no slope to the land, so flood waters recede very slowly.

Urban areas were also hard hit due to the flooding along the Parana River, the Uruguay River, and the Paraguay River. Thousands of families along the rivers have already been forced from their homes and more rain fell across the region this week. In the flooded areas, the concern is that some soybean fields will be a complete loss once the flood waters recede.

Accurate estimates of the number of hectares of soybeans and corn that have been flooded are difficult to determine due to many areas still being inaccessible and the ongoing nature of the wet weather. Additionally, many farmers in the area have hay and pasture in addition to row crops, which makes it even more difficult to determine how many hectares of soybeans have been lost.

In their latest weekly report issued yesterday, the Buenos Aires Grain Exchange lowered their estimate of the Argentine soybean crop 4 million tons from 60.0 million tons to 56 million tons. That would now put the crop 7.9% below last year's 60.8 million ton production. In the flooded areas, they cited lost acreage and lost yields as the reason for the decline. In the hardest hit areas, many fields will be completely lost while others will suffer losses in the range of 15% to 30%.

The Ministry of Agriculture in Argentina also reduced their estimate of the nation's soybean crop. They reduced their estimate by 3.3 million tons from 60.9 million to 57.6 million.

The soybean harvest in Argentina has basically been paralyzed for three weeks due to the wet weather. In their most recent estimate, the Buenos Aires Grain Exchange estimates the soybean harvest at 16% compared to 46% harvested last year. This marks the slowest soybean harvest in Argentina in at least a decade

If a mature soybean plant is underwater even for a short period of time, the seeds swell in the pods and start to sprout, resulting in a complete loss. Even if the field is not flooded, a continuous stretch of wet weather can have a devasteing impact on the soybean crop. The seeds can start to sprout in the pods or the seed turn moldy. Repeated periods of wetting and drying when the crop is mature can result in shrunken, light weight soybeans or moldy soybeans. All of those ill effects are currently being reported by farmers in Argentina.