Argentine Soy Prospects Dimmed by Most Rain in 50 Years

Argentina’s soybean production forecasts are set to be lowered as the highest rainfall in half a century dims the outlook for yields and impedes harvesting.

Estimates for the Pampas, Argentina’s main soybean region, probably will be trimmed after excessive rain in Santa Fe and Cordoba provinces in the last month, Rosario Securities Exchange crop analyst Cristian Russo said. The provinces account for an estimated 30 million metric tons, about half the country’s total soybean crop. Argentina is the world’s largest exporter of soybean oil and third largest of soybeans.

In the past 32 days, Santa Fe and Cordoba received the same amount of rain that fell in half a year in 2014, with more than 1 million acres affected by floods. Since Feb. 15, 10 Cordoba residents died and 2,500 people have been evacuated from areas that resemble a rural Venice in televised reports. Argentina’s soy output is forecast at a record 58 million tons by Rosario Exchange and Argentina’s Agricultural Ministry.

“I have never seen this in my life; forecasting has become impossible and we won’t provide a firm forecast until next week,” Russo said Thursday in a phone interview. “We will still have a record crop, maybe 57 million, but it isn’t going to be the big party everybody expected a month ago before the rain started as the floods are damaging areas and the crop will be hit with fungus related diseases.”

‘Significant Losses’

Cordoba province issued an alert for Asian rust for the first time since 2007 on Tuesday after excessive rain increased risks for the soybean crop, according to Cesar Alonso, a crop analyst at the Cordoba Grains Exchange. There haven’t been any fungus disease cases detected yet in Cordoba, he said.

The Buenos Aires Grains Exchange didn’t cut its soybean forecast in its weekly report released Thursday. The Exchange is still assessing the extent of damage that may result in “significant losses” to the crop, it said in the report on its website.

“It’s too soon to say how much will be lost,” Esteban Copati, a soybean analyst at the exchange, said in a phone interview. “We won’t know for sure until farmers can access the fields to check it out.”

The Buenos Aires Grains Exchange is forecasting 57 million tons of soybeans for the 2014-15 season. Soybean harvesting runs from mid-March through July.

Economic Impact

Cordoba’s exchange said in a separate report Thursday it expects soybean and corn output to be cut. As much as 500,000 hectares (1.23 million acres) have been affected by the floods, which are expected to cause large crop losses and have a strong economic impact, the exchange said.

“Union district in Cordoba has received 392 millimeters (15.4 inches) of rain year to date,” Alonso said in a phone interview from Cordoba. “That’s a 65 percent increase compared with the seven-year average.”

According to Alonso, losses can occur on yield cuts because of fungus or delays in harvesting as the rain is taking place at the beginning of harvesting and floods will impede harvesting machinery access to fields. Cordoba was expected to produce 15 million tons of soybeans.

Argentina’s most productive province, Buenos Aires, has received a normal amount of rain so far this year.

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