'Erratic' Weather Leads Consultant to Trim Argentine Corn, Soybeans

January 10, 2017 09:42 AM

South American Crop Consultant Dr. Michael Cordonnier says "erratic" weather has led him to trim his Argentine corn and soybean crop estimates. He has lowered his soybean crop peg by 1.0 MMT to 55.0 MMT and his corn estimate by 500,000 MT to 34.5 MMT. He notes while farmers in the core production regions of the country are struggling with heavy rains, flooding, hail and severe storms, producers in southern areas face prolonged drought and high temps that have resulted in wild fires.

The Buenos Aires Grain Exchange estimates soybean planting in Argentina to be 93% complete, leaving an estimated 1.3 million hectares unplanted. "The soybean acreage left to plant does not include any soybeans that may need to be replanted due to the flooding or saturated conditions," says Cordonnier, also noting recently planted fields will be a complete loss and will need to be replanted if it dries out in time.

"If the saturated areas of central Argentina remain dry for the next two weeks, some of the flooded soybeans could be replanted. If the saturated areas receive more rain over the next two weeks, a lot of the drowned out soybeans will not be replanted because the planting window will have already closed," says Cordonnier. "The planting window for soybeans in central Argentina generally closes by January 10th, but it could be extended for an additional ten days or so under special circumstances such as what is occurring this year. Therefore, it is possible that an additional 300,000 hectares or more of soybeans could be lost due to the flooding and saturated conditions. Combining the losses from flooding and drought, the 2016-17 Argentine soybean acreage could decline as much as 600,000 hectares or more from initial estimates or approximately 3%."

Meanwhile, the grain exchange estimates Argentine corn planting is 83% complete, leaving 840,000 hectares left to plant. "There should not be any major problems getting the remaining corn planted in northern Argentina," says Cordonnier, although noting there will be some corn acreage lost to flooding in central Argentina.

"The planting window for corn in central Argentina has already closed, but in an emergency, farmers might still try to replant corn until about January 20th. How much that might be lost is open to speculation, but I would estimate that it would be less than 100,000 hectares," says Cordonnier. "The corn impacted the most will be the latest planted corn that was still relatively small during the recent wet episodes. In the core production areas, the corn was planted early and it is now past pollination and into grain filling, so it should be impacted less than the soybeans in the region."

Dr. Cordonnier 2016-17 Soybean Estimates
Est.
Maximum
Minimum
2015-16

in million metric tons

Brazil
103.0
105.0
100.0
95.5
Argentina
55.0
57.0
52.0
56.0
Paraguay
9.1
10.0
8.5
9.0
Bolivia
3.1
3.5
2.7
3.0
Uruguay
3.0
3.5
2.7
2.0
Total
173.2
179.0
165.9
165.5
Dr. Cordonnier 2016-17
Corn Estimates
Est.
Maximum
Minimum
2015-16

in million metric tons

Brazil
86.0
92.0
84.0
66.0
Argentina
34.5
36.0
32.0
27.0
Paraguay
3.2
4.0
2.7
3.1
Bolivia
0.7
1.0
0.6
0.7
Uruguay
0.4
0.6
0.3
0.4
Total
124.8
133.6
119.6
97.2


Cordonnier left his Brazilian crop pegs unchanged, but has a neutral to lower bias toward the soybean crop due to dry weather in east-central and northeastern Brazil. He estimates dryness encompasses between 12% to 15% of Brazil's soybean production region. "The remainder of the soybeans in Brazil are generally doing fine," he says. "The early soybean harvest is under way in Mato Grosso and the pace will pick up this week as more of the crop reaches harvest maturity. Early reports indicate that the yields are somewhat better than expected which, is no surprise given the good growing conditions thus far this season."

Cordonnier says in the worst-case scenario, where dry areas of Brazil only receive half of their normal rainfall the remainder of the growing season, the soybean crop could decline 2 MMT to 4 MMT. "That would be an extreme case and that is not currently expected," he adds.

Meanwhile, Cordonnier has a neutral to higher bias toward the Brazilian corn crop, noting his estimate "is a little lower than some other estimates mainly because we will not get a good handle on the safrinha corn production potential until we see what the weather will be during the February to May period."