Argentine soy, corn face ‘worst-case’ drought scenario

BUENOS AIRES (Reuters) – Argentina’s soy and corn
fields were expected to stay mostly dry next month as a
four-month-old drought bites deeper into crop yields, analysts
said on Wednesday, with one warning of a “worst-case scenario”
developing on the Pampas grains belt.

Hot, dry weather in the world’s No. 3 exporter of raw
soybeans and top supplier of soy meal livestock feed has pushed
up prices on the Chicago Board of Trade (CBOT) in recent weeks,
with soybean futures hitting a seven-month peak on Tuesday.

“The worst-case scenario on rainfall, or lack thereof, is
now expected to be realized for Argentina’s corn and soybean
crops,” said Isaac Hankes, a weather research analyst at Thomson
Reuters’ Lanworth commodities and weather forecaster.

Hardest hit will be corn, which matures sooner in the season
than soy, Hankes said in a telephone interview.

“The March outlook features continuing dryness as the most
likely scenario. The only positive is that extreme, consistent
heat is absent in both the short-term and extended March
forecast,” he added.

Later on Wednesday the Rosario grains exchange was expected
to release its latest monthly crop report. Last week the lead
analyst for the exchange told Reuters that it was likely to chop
its forecast of a 52-million-tonne 2017-18 soy crop to 50
million tonnes or lower.

Gustavo Lopez, head of Buenos Aires-based consultancy
Agritrend, said in an emailed statement that he expected this
season’s soy crop to be 47 or 48 million tonnes while he sees
the corn harvest at 37.5 to 38 million tonnes.

“The weather forecasts show little likelihood of rain over
the short term, which makes the development of crops very
difficult,” Lopez said.

Pablo Adreani, head of Argentine farm consultancy Agripac
said this week he had chopped his 2017-18 soy harvest forecast
to 47 million tonnes from an original 57 million. He also cut
his corn crop estimate to 37 million tonnes from 42 million
tonnes.
(Reporting by Hugh Bronstein; Editing by Jonathan Oatis)

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