flood-threatened soybean hopes received a triple downgrade, with the country's
farm ministry and two grains exchanges cutting sowing estimates – but not as
deeply as some other commentators have done.
The Buenos Aires
grains exchange - which two weeks ago cut its forecast for Argentina's soybean
sowings for 2016-17 by 300,000 hectares, blaming drought in southern areas -
downgraded the total by a further 100,000 hectares, citing "new rains
received last weekend" in inundated areas further north.
The downgrade, left
the plantings estimate at 19.2m hectares, a drop of 900,000 hectares year on
Argentina's farm ministry issued a bigger downgrade to its sowings forecast, of
500,000 hectares, although this still left officials with a 19.8m-hectare
estimate, bigger than that of the exchange.
eastern Buenos Aires, in the centre of Santa Fe and parts of Córdoba, a
significant number of fields were left unsown," said the ministry, whose
data show an 800,000-hectare drop in soybean area year on year.
And the Rosario
grains exchange, which has gone as far as making production estimates, cut its
forecast for output by 1.5m tonnes to 52.9m tonnes.
The figure was
based on ideas that flooding has cost 710,000 hectares of soybeans in the of
north Buenos Aires province and south of Santa Fe provinces, with further
300,000 hectares in southern Buenos Aires lost to drought
follow enhanced concern, and speculation, over the extent of losses to
Argentina's soybean crop from rains which, according to a report in La Nacion,
have landed rains of up to 60mm – equivalent to nearly 2 feet - on the country
over the past month.
provoked in particular over inundations last weekend, fuelling a rally in
Chicago soybean futures of 6% over four sessions, driving the spot March
contract to a six-month high on Wednesday.
The prospect of soy
crop losses has also spurred a surge in Chicago soymeal futures, which soared
11.5% in the four sessions to Wednesday, with Argentina the top exporter of the
high protein feed ingredient.
But the grains
exchange and ministry estimates remain more conservative of those from some
other commentators on estimates for losses to the heavy rains, which La Nacion
said seriously affected nearly 2.5m hectares of land overall, while potentially
a further 1m hectares less severely inundated.
At US broker CHS
Hedging, Joe Lardy said that the exchange "numbers are in sharp contrast
to many private analysts that think over 2m hectares have been lost and total
production is down to around 50m-51m tonnes", from the 57m tonnes at which
the US Department of Agriculture has pegged the crop.
Earlier this week,
Michael Cordonnier, the influential soybean and corn analyst, said that
"the amount of soybean hectares impacted might be in the range of
2,000,000 hectares and counting, or approximately 10% or more" of total
hectares are some of the most productive in Argentina and once the area dries
out, it will be too late to do any replanting.
the hectares that are currently flooded will probably be a complete loss."
The Buenos Aires
grains exchange said that "to date it is estimated that some 770,000
hectares of soybeans are affected by excess water.
the weather during the next weeks, the amount of crop lost would exceed half of
The exchange also
said that 290,000 hectares of corn sowings, mainly in Buenos Aires, Cordoba,
Entre Rios and Santa Fe provinces, were "at risk" from the heavy
rains, but kept is estimate for Argentina sowings of the grain at 4.90m
More than 95% of this
area has been seeded – compared with a progress rate of some 68% a year ago.
The farm ministry,
meanwhile, kept its estimate for Argentina corn plantings, including crop
intended for silage, at 7.25m hectares, but flagged "severe flooding"
in Buenos Aires, Cordoba and Santa Fe "that will have a negative impact on
For wheat, the ministry lifted its estimate for the harvest,
which is all but completed, by 800,000 tonnes to 16.5m tonnes, citing survey
results which showed sowings larger than had been thought, at 5.34m hectares.
That represents a 110,000-hectare upgrade from last month's
estimate, and a rise of nigh on 1.0m hectares year on year.