BUENOS AIRES, Argentina (Reuters) — The drought in the heart of Argentina’s Pampas grain belt is expected to reduce corn yields and cut up to 3.7 million tonnes from the projected 2017-18 harvest, local analysts have said.
Argentina, the world’s third largest corn exporter, has been hit by extremely dry weather that has slowed late season soybean planting, raising fears that some fields will go unseeded, while the Southern Hemisphere summer sun dries up corn yields in important farm areas.
Farmers only have another week to plant soy in order to harvest before frosts might hit in May and June. Argentina is also the world’s third biggest soybean supplier.
“The problem with corn is not so much that of reduced planting area as it is the effect that the drought will have on yields,” said Gustavo Lopez, head of the local consultancy Agritrend, which expects a 2017-18 crop of 38.3 million tonnes, down from a previous estimate of 42 million tonnes.
Lopez said he forecasts Argentina’s exportable surplus will be 23.5 million tonnes, down from his pre-drought estimate of 27 million tonnes.
Argentina started 2017 with the opposite problem. Many areas had been flooded by excessive rain, but long hot stretches of sunshine later in the year parched prime corn and soy areas in the northern part of bread-basket province Buenos Aires.
The Rosario grains exchange recently cut its corn crop estimate by four percent to 39.9 million tonnes.
The Pampas recently received rain but the distribution of the showers was uneven, leaving many areas parched.
Rosario exchange analyst Cristian Russo said this season’s corn yields will be less than the average of the last three years.
“In the areas that were less fortunate in receiving the recent showers, the drought will continue,” he said.
The most optimistic analysts say harvest losses in drought-stricken areas could be offset by higher than expected yields in other regions.
“This could provide a cushion in terms of average yields,” said Esteban Copati, chief analyst at the Buenos Aires Grain Exchange, which has stuck by a 2017-18 corn crop estimate of 41 million tonnes that it announced in September.
However, the exchange could cut its harvest estimate next month if hot and dry conditions remain in Buenos Aires.
Pablo Adreani, head of local consultancy Agripac, has trimmed two million tonnes from his corn harvest estimate to 38 million tonnes.
“There are areas that have been very much damaged by drought in December, with yield reductions of up to 50 percent,” he said, adding that his current estimate could rise or fall depending on January and February rains.
“Mid-February is when the overall picture is going to be defined with greater certainty, once the planting is finished,” said Alberto Morelli, president of Argentine corn industry chamber Maizar.
Argentine farmers harvested 39 million tonnes of corn last season, according to the Buenos Aires exchange.