Feb 27, 2018

Argentine Soybean Estimate Continues to Decline

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

The first part of the week saw some modest showers in Argentina with cooler temperatures and then there were a few showers again over the weekend, but the showers were not enough to reverse the overall hot and dry pattern that has afflicted the country for several months.

The forecast looks even more worrisome with very little rainfall in the near term forecast and hotter than normal temperatures. There are some showers in the forecast for far western and northern areas, but very little in the principal production areas.

The better soil moistures can be found in far northern Argentina while the driest areas are generally in central and southern areas. In fact, the Rosario Grain Exchange reported last week that in some areas of southern Santa Fe, northern Buenos Aires, and southeastern Cordoba the rainfall this growing season has been the least in the last 70 years.

I always assume it is going to rain at some point, but the longer the rain is delayed, the worse it is going to get. If it stays basically dry for two more weeks, many of the soybeans will not be able to recover even a portion of their lost yields. One analysts in Argentina indicated that they would need 8 inches of rainfall over the next 15 days to save the soybeans crop. I don't think it would take that much to save the crop, but unfortunately, there isn't even a half an inch of rain in the forecast for the next two weeks!

The early-planted soybeans in Argentina are now in their critical pod filling period when adequate moisture is essential. A typical soybean field in Argentina is at the same stage of development as a soybean field in the U.S. would be during the first week of August. The Buenos Aires Grain Exchange is estimating that 75% to 80% of the soybeans are rated average or poor and that approximately 75% of the soil moisture is rated short to very short.

The cooperative Agricultores Federados Argentinos (AFA) is estimating that in the core production regions of Argentina, the soybean yields will be down 27% with some of the worst areas down as much as 44%. They feel the double crop soybeans could be even worse with loses more than 50%, with some even as high as 80%. They indicated that it all depends on when the region receives the next significant rain.

Everyone is lowering their estimates for the Argentine soybean crop, here are a few examples:

In addition to lower yields, there is going to be fewer harvested hectares than what was originally expected. A combination of fewer planted hectares and increased abandonment is probably going to result in fewer harvested hectares. There have already been reports that farmers are no longer willing to invest any more resources into the crop such as fungicides and insecticides, which could make the situation even worse.