Farmers in Brazil and Argentina, South America’s biggest corn and soybean growers, face dry weather just as planting is about to begin, Oil World said.
Dryness stretching from the central Brazilian states of Mato Grosso and Goias into most crop areas in Argentina is stressing wheat fields and delaying the start of sowing corn, soybeans and sunflowers, the researcher said today in an e- mailed report. Argentine growing areas had 10 percent or less of normal rainfall in August and Brazil probably will remain dry through September’s third week, according to the report.
Dry weather in Brazil "is delaying the start of corn and soybean plantings and jeopardizing satisfactory germination," Hamburg-based Oil World said. "It is still early in the season, but there is an increasing risk that insufficient soil moisture will result in deteriorated new crop prospects."
Soybean futures on the Chicago Board of Trade, the global benchmark, climbed 12 percent since the end of July as heat and dryness eroded crops in the U.S., the world’s biggest grower of the oilseed. Brazil is the largest global soybean exporter and Argentina ranks second for corn shipments, after the U.S.
Rain was heavy in southern parts of Brazil, including the state of Rio Grande do Sul and southern Parana, as well as growing areas of Uruguay and Paraguay, Oil World said.
Argentina started "isolated" corn sowing in this month’s first week, while "well-spread rainfall is urgently required" in the provinces of Cordoba and Santa Fe in the next two to four weeks, the researcher said. Extended dry weather means planting may be below the 3.56 million hectares (8.8 million acres) estimated by the Bolsa de Cereales de Buenos Aires, according to the report.
Sunflower planting stopped temporarily in Argentina in the week of Sept. 5 because of dry conditions, even though fieldwork must finish in northern areas by the end of this month, Oil World said. Planting may fall short of this year’s intended area of 1.9 million hectares, it said.
Soybean planting in Argentina usually only starts in October or early November, so there is still time for rain to arrive, Oil World said. Recent price gains may also encourage farmers to expand sowing if conditions improve.
"For South American farmers, soybeans have gained considerable attractiveness relative to corn and other crops," the researcher said. "We have raised our forecasts of soybean plantings for Brazil and Argentina at the expense of corn. This is likely to improve the soybean crop size in early 2014, unless weather conditions deteriorate."
World soybean production may be 280 million metric tons in the 2013-14 season, or 14 million tons more than a year earlier, according to the report. Oil World said it plans to release new supply and demand forecasts for 10 major oilseed crops, including breakdowns by country, in its next monthly report.