Jan. 17 (Bloomberg) -- Corn farmers in Argentina, the world’s second-largest exporter of the grain, are forecast to receive “very little” rain over coming days as a renewed heat wave pushes temperatures toward 100 degrees Fahrenheit.
“The outlook isn’t encouraging,” Maximiliano Zavala, a forecaster at the Buenos Aires Cereals Exchange, said in a telephone interview yesterday. “A heatwave is expected over the next few days, with a peak on Saturday. Temperatures are forecast to reach 38 or 39 degrees” Celsius (100 degrees Fahrenheit) in Santa Fe and Buenos Aires provinces.
The La Nina weather pattern is harming corn crops in Argentina and Brazil. As many as 11 million metric tons of the grain may have been lost in the two countries because of the drought, Sao Paulo-based forecaster Agroconsult said Jan 12. Mexico, the world’s fourth-largest producer, is also experiencing its worst ever drought in parts of the country.
Argentine Agriculture Minister Norberto Yauhar today declared a state of emergency in the provinces most affected by the drought, Hugo Biolcati, president of the country’s biggest farm group, told journalists in Buenos Aires. Biolcati took part in Yauhar’s second emergency meeting in a week to discuss measures to assist farmers most affected. The state of emergency may give producers access to tax incentives and funds.
Corn for March delivery rose 1.2 percent to $6.0675 a bushel at 1:05 p.m. on the Chicago Board of Trade, after slumping 6.8 percent last week. Soybeans for March delivery rose 2.1 percent to $11.82 a bushel, the first gain since Jan. 9.
Soybean and corn futures are also advancing on speculation China will ease monetary policy after the economy expanded at its slowest pace in 10 quarters, potentially boosting demand for raw materials.
The U.S., Brazil and Argentina are the world’s first-, second- and third-largest producers of soybeans, respectively.
“Corn is in much worse shape than soybeans,” Zavala said. “There have been areas that have received a little rain, but it evaporates with these temperatures.”
Argentina’s “severe” lack of rain over the last few weeks will lower the corn crop yield to about 6 tons per hectare (2.5 acres) from the 6.9 tons initially expected, the Rosario Cereals Exchange said in a Jan. 13 report.
Rain on Jan. 10-11 provided about 40 percent of the main growing regions with precipitation levels of more than 40 millimeters (1.6 inches), the Rosario exchange said in a separate report. The soybean crop needs 40 millimeters to 140 millimeters, the exchange said.
A drought is also reducing the corn crop in Mexico, the world’s fourth-largest corn producer. The country will probably produce between 22 million and 23 million tons of the grain this year, less than the 24.5 million tons previously forecast, Agriculture Minister Francisco Mayorga said on Dec. 16.
Mexico, which is experiencing its worst drought on record in the northern states, is not expecting any rain today in the most affected states, according to a weather bulletin of the National Meteorological Service. The nation’s interior ministry said yesterday it was spending over 22 million pesos ($1.6 billion) to help communities experiencing scarcity of water.
Mexico’s agriculture ministry is transferring some corn production from higher yield northern states to the country’s southeast. Mexico has relocated 123,305 hectares of corn crops to nine southern states, the ministry said yesterday.
Drought Until June
“Mexico’s drought may last until mid-June, when the rainy season starts,” Jesus Carachure, a National Meteorological Service officer, said today in a telephone interview. “Last year we had very few rains and we’re not expecting any rainfall for the northern states any time soon.”
No rain is forecast today in the main growing areas of Brazil’s Rio Grande do Sul state, which produces about 14 percent of the country’s soybeans and 10 percent of its corn, according to the Website of weather forecaster Somar Meteorologia.
Rain in Rio de Grande do Sul since Jan. 13 increased soil moisture by about 70 percent for corn and 80 percent for soybeans, Dulphe Pinheiro Machado Neto, a manager at state crop-forecasting agency Emater, said yesterday. Losses to corn are irreversible, though rains are preventing further losses, Machado Neto said.
Rio Grande do Sul’s government declared a state of emergency in 291 of its 496 cities, an increase from 282 cities yesterday, according to information on the state civil defense department’s website.
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