More than 3m tonnes of Argentine soybeans at risk - Oil World
By - Published 15/04/2016

More than 3m tonnes of Argentine soybean production is at risk if rains continue, Oil World said, as the Rosario and Buenos Aires grains exchanges cautioned they were preparing to make crop downgrades.

Currently "roughly 2m-3m tonnes of Argentine soybeans are at risk of being lost to flooding", the influential oilseeds analysis group said.

However, the losses "may even turn out above this range if the forecast above-normal rainfall materialises in the affected region in coming days", Hamburg-based Oil World said.

The rains - which have actually damaged crops through quality factors, such as encouraging sprouting in the pods, besides direct flooding – have been particularly strong in Santa Fe and Entre de Rios in the west of Argentina's soybean belt.

And inundations, which often occur in Argentine growing areas in times of El Nino, are expected to continue until at least next week.

"Some wetness will continue to build in Santa Fe and Entre de Rios as rains there will be quite heavy again," weather service MDA said.

'We are very concerned'

Separately, Alberto Padoan, president of the Rosario grains exchange, on Thursday said that Argentine soybean crop losses may be "as much as 2.4m tonnes", adding that "we are very concerned".

The exchange currently forecasts the crop at 59m tonnes, in line with the estimate from the US Department of Agriculture.

Overnight, the Buenos Aires grains exchange said it might downgrade its estimate, raised last month to 60.0m tonnes before rain damage, thanks to the "continued bad weather accompanied by heavy rains over much of the" key soybean growing region.

"Excess" water has "generated floods, and damaged road and field surfaces, while persistent wetness in ripe crops is causing… grain losses and sprouting", as well as some disease, the exchange said.

"Not only has this ruled out any chance of raising our production forecast above 60m tonnes but, on the contrary, raised the possibility of a downgrade to the current projection."

Corn optimism

The rains have also slowed the soybean harvest, and the availability of crop at port, so hampering the drive by Argentina, the third-ranked exporter of the oilseed, to ramp up ag shipments and boost foreign currency inflows.

"About 15% of the Argentina soybean crop is harvested, up nominally from last week, and about half the pace of where it was this time last year," said Terry Reilly at Chicago broker Futures International.

However, the rains have yet to dampen expectations for the harvest of corn, whose growing area is centred a little south east of that for soybeans.

The Rosario exchange raised by 500,000 tonnes to 25.0m tonnes its forecast for the Argentine corn harvest, citing higher-than-expected yields from the early harvest, a result backed by the Buenos Aires exchange.

The few results in so far show yields "above initial expectations", the Buenos Aires exchange said, estimating harvest at 18.8% complete – up only 0.8 points week on week, and meaning a delate of 5.3 points year on year.

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