The La Nina weather pattern is proving more clement to farmers in Brazil than those in neighbouring Argentina. Still, that does not mean that Brazilian growers are in the clear.
The US Department of Agriculture's Buenos Aires bureau joined the throng of observers cutting hopes for Argentina's corn production, warning in a report that warmer temperatures and a lack of rainfall had caused "depletion of soil water reserves and water stress" to crops.
The downgrade, to 24.0m tonnes, left the bureau's estimate 1.0m tonnes below the USDA's much-watched official estimate, which could be revised in a monthly update on January 12.
The bureau's forecast for Argentina's corn shipments was, at 16.1m tonnes, 1.4m tonnes lower than the current USDA figure, with latest ideas on controversial government export limits factored into the depressed forecast.
Furthermore, the report stressed that no imminent progress was likely on a high-profile corn export deal with China, which will require agreement on crop standards that "could take months or even years to complete".
Concentration concerns
Conversely, crop prospects looked better in neighbouring Brazil where, USDA attaches lifted their hopes for the country's soybean crop by 720,000 tonnes to 67.5m tonnes, flagging farmers' greater use of higher quality seed in the face of what had proved, so far, a "mild", if "prevalent", La Nina.
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USDA attache view of Brazil 2010-11 soybeans, (year-on-year change)
Area planted: 24.05m hectares, (+2.8%)
Production: 67.5m tonnes, (-1.7%)
Exports: 31.2m tonnes, (+2.3%)
Crush: 33.72m tonnes, (-0.8%)
Feed, waste: 31.0m, tonnes, (+5.1%)
Year-end stocks: 1.39m tonnes, (-20%) |
The proportion of the crop planted with genetically modified seed had risen to 80% this season, from 65% in 2009-10, allowing sowings to top 24m hectares.
Nonetheless, the dry start to the sowing season had forced a concentration of plantings which could yet bite growers later in the year, forcing "consolidated maturation stages" which will leave crops "more susceptible to potential adverse weather conditions".
Furthermore, it will squeeze the harvest period, a factor "expected to strain ports capacities and further increase logistics costs".
Brazil's slow pace of infrastructure improvements continues to reduce producers' profitability," the officials said, noting that freight costs from Centre West to port were expected to surge 20%.
String of downgrades
The comments come amid a close watch by global investors on prospects for South American crops, after drought two seasons ago prompted steep declines to, in particular, Argentine harvests.
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USDA attache view of Argentina 2010-11 corn, (yr-on-yr change)
Area harvested: 3.2m hectares, (+18.5%)
Production: 24.0m tonnes, (+5.7%)
Exports: 16.1m tonnes, (+0.6%)
Domestic consumption: 7.5m tonnes, (+5.6%)
Year-end stocks: 1.04m tonnes, (+66%) |
Argentina's crops have continued to attract downgrades, with the country farm ministry on Tuesday cutting to 20m tonnes its forecast for corn production, which was initially pegged at a record 26m tonnes.
US-based Michael Cordonnier trimmed his estimate to 19.5mm tonnes, while downgrading his forecast for soybean output for a third successive week, to 45m tonnes.
Oil World last month estimated the soybean harvest could fall to 43m tonnes.
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