South America’s crop prospects deteriorated because of excessive rainfall in Argentina and dry conditions in central Brazil, according to Oil World.
Brazil’s soybean-growing states of Mato Grosso, Mato Grosso do Sul, Goias and Minas Gerais have very low soil moisture and irreversible damage will occur if sufficient rain fails to arrive in the next two to three weeks, the Hamburg-based researcher wrote in an e-mailed report today.
“Forecasts of a record harvest in South America are premature, which has resulted in increased nervousness, particularly among consumers,” Oil World wrote.
Soybeans advanced 26 percent in Chicago trading this year and corn climbed 14 percent as the worst U.S. drought since 1956 reduced yields in the Midwest, after dry conditions already curbed supplies from Latin America.
“Torrential rainfall” in Argentina made field work impossible, with flooding or excessive wetness preventing farm machinery from entering fields for at least two weeks, according to Oil World. That means corn and sunflower planting will fall short of earlier estimates, the report showed.
The risk is growing that Argentina’s soybean crop will be 3 million to 6 million tons below initial estimates of 55 million to 56 million tons, Oil World wrote. The outlook for a Brazilian soybean crop of 81 million tons will “most likely” have to be cut, the researcher said.
“One common characteristic for both Argentina and Brazil: soybean plantings are significantly delayed, which will make it impossible for farmers to carry out their original intentions of early harvesting and crop delivery,” Oil World wrote.
The start of soybean harvesting may be delayed two to three weeks in both countries, keeping the world dependent on U.S. supplies for “longer than desired” in 2013, according to the researcher.