The drought in Argentina's cereal belt around Buenos Aires runs the risk that not all 18.1 million hectares intended for sowing soybeans will be ordered with the oilseed. This was announced yesterday evening by the Buenos Aires Grains Exchange in a press release.
The planting season will end there next weekend and the stock exchange expects that up to 2.25 million hectares will not be ordered. On areas where wheat and barley were previously cultivated, the stubble now stands in parched soils.
Argentina is the world's largest exporter of soybean meal and the third largest of corn and soybeans. Farmers harvested 130 million tonnes of grain and oilseeds there last season; Of these, 97 million tonnes were corn and soybeans. If the drought persists, the harvest will be reduced to 118-120 million tonnes this season.
The drought is helping to prevent the prices on the agricultural futures exchanges from falling further. The pressure on prices came after the US harvested bumper crops of corn and soybeans.
While there is still a bearish undertone on the futures markets, market participants are closely monitoring the weather in South America. A smaller harvest there should improve demand for US corn and soybeans. Since the end of November, soybean prices on CBoT have fallen by 2.5% and corn prices by 1.3%.
Recently, the Argentine Stock Exchange Rosario had delivered a crop estimate of 127 million tonnes. Meanwhile, analysts see this goal as impossible. Conservative estimates now assume a yield loss of 5%, equivalent to 6.35 million tonnes. This would have to reduce the forecast to 120 million tonnes.
Text: HANSA Derivatives Trading GmbH / / Graphic: Saxo-Trader 
