February could yet prove a yield saver for South American crops even if the La Nina causes the weather disruption that looks increasingly likely, prompting sharp gains in Chicago crop prices.

Corn jumped 3% on Monday, this time outperforming soybeans, up 0.9% in late deals, which have already enjoyed rises on concerns about South American weather.

The increases followed forecasts of continued dry weather in Argentina southern Brazil, and heavy downpours in central Brazil, typical symptoms of La Nina, and sparking concerns that the weather pattern will indeed prove a setback to crops.

Separately, Argentina's government cut by 1.5m tonnes to 12m tonnes its forecast for its ongoing wheat harvest, blaming dry conditions in Buenos Aires state earlier in the season. Chicago wheat soared 3% at one point to cross back above $6 a bushel.

'Not looking good'

"The weather in South America has turned more threatening. The market is adding risk premium to the market," US Commodities said.

At Powerline Group, Darren Dohme said: "The situation in Argentina and south Brazil is not looking good."

Indeed, with a "strengthening" of the Pacific water temperature anomaly associated with La Nina, "the odds are growing that the developing Argentine/southern Brazilian drought will worsen during early January", Mr Dohme said.

At World Weather, meteorologist Drew Lerner said that "almost all" of Argentina's summer grain and oilseed producing region "is enduring one level or another of stress".

"Early season yield potentials may be sliding lower," he said, adding that rains forecast for Tuesday and Wednesday need to be widespread to ensure that crop setbacks do not "go from bad to worse when dry weather resumes".

'In the nick of time'

However, at WxRisk.com David Tolleris said that February could yet give the real verdict on the crop, having the potential to undo considerable weather damage.

Earlier this year, a similar pattern of Argentine dryness and central Brazilian inundations unwound in February when the "La Nina rapidly collapsed, which allowed the weather patterns to return back to normal," he said.

"The heavy rains over central and east central Brazil ended, and conditions dried out so the crops there finished strongly.

"In a similar manner the rainfall patterns increased significantly in February over south eastern and south west Brazil, Paraguay and a good portion of Argentina. These crop-saving rains literally showed up in the 'nick of time'."

Late start... 

Similarly, February 2012, when the South American autumn harvest begins ramping up in earnest, could be another make-or-break month.

"It is way too early to know if or when the rains will show up in February 2012, like they did last February."

However, given that the current La Nina started later than the 2010-11 event, "it could continue in March and/or April", implying greater yield damage.

"All the climate model shows this," Mr Tolleris said.