Argentina’s local stock exchanges cut corn production

Every year of La Nina brings a delicate scenario to southern South America. After two problematic seasons (in 2022 there were the sharpest soybean crop losses in the history of Brazil, Argentina and Paraguay), the 22/23 season continues with the same phenomenon present with its risks, albeit with less intensity for the region. In this season, this scenario is affecting especially Rio Grande do Sul and Argentina, while Paraguay and most of Brazil show signs of excellent production.

The signs of a La Nina for the third consecutive year reaching South America, in a summer crop, left markets prepared for speculative movements. Soybeans failed to reflect the trend of a record Brazilian crop so far, and corn raises concern about the end of the size of the Argentine crop, which will be important to supply the global market between May and September.

In Brazil, the irregular weather at the beginning of planting and low night temperatures, unusual in the spring, delay the soybean cycle a little, which has a harvest delay of almost 20 days. This must not compromise the planting of the 2023 second crop, but it is no longer a planting within a perfect window. Rio Grande do Sul, once again, was affected by the spring climate with little rain reaching the critical corn stage (pollination and silking). This is not a production loss equal to those in 2022, however, it must also be significant and will be properly evaluated as the harvest defines average productivity in the west of the state. December and January were better in terms of rainfall, and this must ease the losses in other areas of the state that grow corn, mainly from Passo Fundo to Santa Catarina. Production cuts will occur but they must be less intense compared to 2022.

In Argentina, the situation has been critical throughout the spring and is still delicate this 2023 summer. There is a situation of agricultural calamity in the province of Santa Fe, the third main grower of corn and soybeans in the country. High temperatures in December and early January have neutralized part of the rains that occurred at the turn of the year and in the last few days. In view of this scenario in Santa Fe, the Buenos Aires and Rosario exchanges cut their projections for corn production to below 50 mln tons (52 mln tons by Safras & Mercado) and to 44 mln tons for soybeans (45.7 mln tons by Safras & Mercado). It is really difficult, in the midst of a climatic situation like this, to define any number ahead. However, these events are deteriorating crop conditions with possible losses reported.

Cordoba and Buenos Aires, the main growers, show a not so extreme production profile. Corn planting reached 83% of the 7.1 mln hectares now expected for planting. Planting must end late this month, with the forecast of better rains in the country this week.

Tags: Production, La Nina, crop, South America, Argentina, Paraguay, global market, corn, Brazil, weather, soybeans