The soybean harvesters get stuck in the mud in Argentina. Rain-soaked soils endanger a healthy harvest in the South American country, where soybean exports are the main source of money to limit the large trade deficit and keep the currency stable.
The soybean harvest was already endangered during the growing season, as a month-long drought limited yields until April. Directly afterwards, heavy rain turned many dried fields into mud deserts.
The excessive wetness could cost the soybean harvest another 5 to 10%.
In some regions, the pods of soybeans have already burst and are lost or germinating on the plant. This reduces product quality and, according to the Buenos Aires Grains Exchange, it will save up to 30% less money. In addition, the weather forecasts for the coming days promise nothing good; it should continue to rain!
The double blow caused by the initial drought and the subsequent heavy rain also moves the financial markets in the South American country. The government is aiming for a trade deficit of a maximum of 2.5%.But the 27.5% export tax on soybeans and soybean oil, as well as soybean meal are planned.
A smaller harvest automatically means less tax revenue, but the country is already in financial difficulties anyway. The Macri government is working with the International Monetary Fund on a strategy to stabilize the economy. Such a joint press release from yesterday.
So far, a nationwide soybean harvest of 37 to 38 million tonnes is expected, which could be reduced by 1 to 1.5 million tonnes due to the rain.
The USDA had estimated Argentina's soybean harvest at 40 million tonnes in April. At the beginning of the growing season and before the drought, the forecast was 57 million tonnes.
In addition, the USDA had recently estimated its harvest estimate for Argentine corn at 33 million tonnes, after 42 million tonnes. In some regions of the country, the corn harvest has also been interrupted due to rain. However, later sown corn can not be harvested until the end of May anyway. But a good corn harvest is not expected anymore.
For the sowing of wheat, the rain is just right and one is optimistic that at least here comes a good harvest.
Text: HANSAFutures Trading GmbH / 
