Can anyone please enlighten on the Argentine weather outlook?
There appear to be as many opinions as the number people asked.
Benson Quinn Commodities, for instance, took a benign view, saying late on Wednesday that “if the forecast for Argentina changed, moisture was added”.
Terry Reilly at Futures International, meanwhile, who draws on advice from World Weather, said that “the forecast for Argentina was drier than Tuesday for the next two weeks, bias western, central, and some southern parts of the country.
“The rest of the growing regions should have enough soil moisture to counter net drying conditions.”
He added that the key growing state of Buenos Aires “will be cold Friday morning but no threatening frost/freezes are expected”.
‘Need rain now’
Meanwhile, Tobin Gorey at Commonwealth Bank of Australia agreed that Argentine forecasts have changed, but was not so sanguine on the outcome.
“Argentina’s soybean regions have significant segments that have seriously depleted soil moisture,” he said.
“Crops in these regions are at a point where they need rain now. Weather forecasters are worried they might not get it.”
He added that “we think that Argentina’s situation is a real danger, if not yet a ‘clear and present’ one, to soybean supply”.
Looking further ahead, Commodity Weather Group issued a warning that Argentina could see dry and hot conditions in January and February, with north east Brazil to prove dry too.
And coming against a backdrop of growing confidence in a La Nina, if a weak one, such an outcome would not appear impossible at all.
All this matters particularly in the oilseeds complex, with Argentina the top exporter of soymeal and soyoil.
Certainly, funds are taking an increasing interest in the soymeal market, at least, if the last session is anything to go by when they
bought 8,000 contracts in Chicago futures – the most for a single session in six weeks.
Indeed, the January soymeal futures contract saw its highest ever trading volumes. And this the day before Thanksgiving, a quiet day for markets as a whole.