MarketsFarm– While both Brazil and Argentina are experiencing different sides of the same coin weather-wise, the conditions have affected their harvests and will continue to do so for the next week or later.
In northern and central regions of Brazil, more than 100 mm of precipitation is expected to fall from March 8 to 16, slightly above normal levels, according to the Global Forecast System (GFS). However, the eastern and southern-most regions of the nation are predicted to be relatively dry. In Argentina, most of the country is in the midst of drought-like conditions with the northern regions to have at most 35 mm or less than half of normal levels during the same period.
The conditions seen over the past two months have had adverse effects on both the corn and soybean harvests in both nations. In Brazil, the soybean harvest has been lagging in output and quality. Transportation of the crop has also been restricted due to the wet conditions, which have also delayed seeding the safrinha corn crop. However, the agricultural state of Mato Grosso is forecast to have sunny skies for a few days after three days of rain early this week.
In Argentina, despite much-needed late-February rain in its corn-growing regions, dry weather has limited expectations for corn and soybean yields as some regions are having its driest growing season in decades. The Buenos Aires Grain Exchange said it may cut its yield expectations for both corn and soybeans below 46 million tonnes for each.
“If there is no rain in the short term that allows the current scenario to be sustained, we could see a fall in yields during the next few weeks,” the exchange said in its weekly crop report on Feb. 25.
In the Chicago Board of Trade, soybean futures reached their highest prices in nearly seven years on March 8 due to supply concerns.
“Brazil’s soybean harvest is being dogged, and a little depleted, by wet weather,” Tobin Gorey of the Commonwealth Bank of Australia said to Reuters. “Argentina’s hot, dry weather outlook is threatening soybean crops.”
Bruce Burnett of MarketsFarm doesn’t see much time for crops in both countries to recuperate their weather-related losses.
“As we move through the next week or two, and the forecast is dry for the next week, I think there’s limited ability for the crops in Argentina to recover because of the later stage (in the growing season),” he said. “We’re certainly going to see some further delays in the corn planting (in Brazil). It makes the upcoming crop situation very tenuous…The concern is that the dry conditions are going to come right when crops are in the reproductive stage.”