Dry weather in South America is threatening to delay soybean planting in Brazil and reduce the area Argentine farmers sow with corn, Oil World said.
Little rain is in the forecast for Mato Grosso, Brazil’s main soybean producing state, in the next two weeks, and precipitation expected in Argentina probably won’t be enough to replenish soil moisture, the Hamburg-based research company said in a report today. Argentina’s corn area will probably be reduced by about 5 percent. Brazil is the world’s top soybean exporter and Argentina ranks second for corn shipments, after the U.S., according to the U.S. Department of Agriculture.
"In Argentina dryness has affected wheat and rapeseed and raised the risk of insufficient soil moisture when summer crop plantings begin," Oil World said. In Brazil, "if sizable rainfall fails to occur in September, the start of the new soybean growing season will be unfavorable. It is still early, but conditions could become problematic and production prospects for soybeans and other crops could deteriorate."
Brazil’s soybean plantings are scheduled to start Sept. 22, Oil World said. Corn planting in Argentina also usually begins in September, according to the USDA.
In Argentina, soybean farmers are holding back on sales on expectations for a devaluation of the currency, Oil World said. The 13 percent weakening in the real in the past seven months against the dollar has helped Brazilian farmers, it said.
Frost in Brazil’s Parana state last month cut the country’s corn and wheat crops by 1 million metric tons each, and will "considerably raise Brazilian wheat import requirements in July/June 2013-14," Oil World said. The government estimates Brazil’s wheat imports will be 5.2 million tons, according to the report.
In the European Union, the rapeseed crop estimate was lowered 200,000 tons from two weeks ago to 20.5 million tons, Oil World said. Production was lower than anticipated in France and Germany, according to the report.