Martell Crop Projections reports about worrisome Argentinean dryness.
(emphasis mine) [my comment]
Brazil Prospects Favorable, Argentina Dryness Worrisome
Crop Progress Tuesdays
South America Soybean Highlights
Monday November 9
Not much rainfall has accumulated in Parana, Brazil, over the past 2 weeks resulting in worsening dryness on corn and soybean farms. Extreme heat last week caused a rapid decline in field moisture, as temperatures soared 10-12 F above normal.
Parana dryness is worse than Rio Grande do Sul though both states saw field moisture diminish rapidly in a heat wave. Parana last received light rainfall October 27th. Rio Grande do Sul has been wetter having received scattered 1-2 inch rains last week. No doubt soybean planting was retarded on dry farms. As of October 30, Parana soybean seeding was 31% complete andRio Grande do Sul 7% complete. November is the main month for planting soybeans in South Brazil.
Argentina drought affects western, northern crop areas: Drought is not resolved in Argentina's grain belt. The western and northern growing areas are very dry, requiring at least 100 millimeters (4 inches) of rainfall to eradicate drought. La Pampa drought is more damaging for winter wheat than soybeans. The best growing conditions exist in Eastern Buenos Aires, Entre Rios, southern Santa Fe and extreme east Cordoba, where field moisture was near normal at the end of October. Rain needed to end drought is shown below, a product of the Argentina Weather Service. Conditions continued dry last week in the drought-affected areas.
Thaindian reports that drought affects 90 percent of Argentina.
Drought affects 90 percent of Argentina
November 2nd, 2009 - 8:04 am ICT by IANS -
Buenos Aires, Nov 2 (EFE) About 90 percent of Argentinian territory is affected by the current drought, although the situation is aggravated in certain provinces by the spread of forest fires, figures released Sunday by officials said.
The most serious situation is in the central province of La Pampa and in Buenos Aires and Cordoba in the north-central region, where thousands of families are facing temperatures exceeding 30 degrees Celsius and are getting along as best they can with the lack of water.
Some cities, like the tourist destination of Villa Carlos Paz in Cordoba, decided to ration drinking water, a move that complicates the normal functioning of those areas and affects a number of productive sectors, including agriculture.
In the northern province of Tucuman, where rivers and dikes are at levels less than 50 percent of their normal average, residents have been waiting for it to rain for seven months and in San Luis in the northwest, no rain has fallen since last February.
To that situation must be added the forest fires that have been raging in recent days in the provinces of Cordoba, San Luis and Catamarca, in the northwest.
Agrimoney.com reports that lack of rain dogs soy in Argentina for second year.
09:53 UK, 4th November 2009, by Agrimoney.com
Lack of rain dogs soy in Argentina for second year
A lack of rainfall is beginning to erode Argentina's soybean prospects for a second season, with analysts at Oil World citing "unfavourably dry conditions" for a 2m-tonne cut to their harvest forecasts.
Some important growing regions had a fraction of their normal rainfall last month, with Santa Fe receiving half its average rain, Cordoba getting 31% and La Pampa in central Argentina recording only 16% of what it had expected.
"Soybean crop prospects have deteriorated due to unfavourably dry conditions in several parts of the country," German-based Oil World said, cutting its forecast for Argentine production to 20m tonnes.
Dry weather, along with a switch to soybeans to cash in on a bouyant market, has already been blamed for a drop in wheat sowings to their lowest for a century.
Expectations are being further dented by the low quality of seed, a reflection in part of last season's drought, which cut Argentine soybean production by a third.
"[Seed quality] could become a serious problem, reducing yields below potential," Oil World said.
The comments echo those of a report from US staff in Buenos Aires last month which warned that so-called "brown bag" seeds — those saved by farmers from harvest as is common practice in Argentina — would "likely have lower germination rates".
Despite the seed concerns, Argentine farmers are believed to have raised plantings by 7% to 19m hectares, according to the Buenos Aires Grain Exchange.
Bloomberg reports that Buenos Aires Cereals Exchange May Lower Argentine Soybean Forecast.
Argentine Exchange President Says May Lower Soybean Forecast
By Rodrigo Orihuela
Nov. 10 (Bloomberg) -- Argentina's soybean growers may plant less than the forecasted 19 million hectares because of drought in parts of the world's third-largest producer, the president of the Buenos Aires Cereals Exchange said.
"We will probably maintain our forecast in tomorrow's estimate, but will be following the drought closely over the next 15 days and may revise it downwards if the situation doesn't improve," Ernesto Crinigan said today in an interview in Rosario, during the Argentine Agroindustrial Conference.
Last week the Cereals Exchange estimated that farmers will plant 19 million hectares (51 million acres) in the 2009-2010 season, in what would be an all-time record crop. The Cereals Exchange releases weekly estimates on Wednesdays.
Sowing of soybeans in Argentina takes place from September through January. Harvesting starts in February. The 2009 harvest was devastated by the worst drought in a century, which reduced the crop to 32 million metric tons.
"Drought in La Pampa and Cordoba provinces and in western parts of Santa Fe and Buenos Aires provinces are worse than were originally expected," Crinigan said.
More USDA Nonsense
Agrimoney.com reports that the USDA says global soybean output to jump 19%.
Global soybean output to jump 19%, US says
10th November 2009, by Agrimoney.com
Global soybean production is set to jump by nearly 19% this year thanks to record production in all of the world's big-three producing nations.
Washington has added more than 4m tonnes to its forecast for world soybean output in 2009-10, citing improved hopes for America, Brazil and third-ranked producer Argentina.
The upgrade to the US harvest estimate — which is now expected to set records for both production and yield - [was based entirely on USDA wishful thinking]
followed findings of higher pod counts in crops major producing states.
Argentine and Brazilian hopes were raised on expectations of a rise in plantings.
The revisions — which were reflected in a 3.6m-tonne rise to 428.9m tonnes in the US forecast for total global oilseed production — were viewed as bearish for prices. [Of course, the USDA is trying to keep prices down, no matter the cost]
Soybeans for January stood 10.25 cents lower at $9.54 a bushel in early deals in Chicago.
However, analysts expressed some surprise at the 500,000-tonne upgrade to 53.0m tonnes in Washington's forecast for Argentine soybean production. [Once again, the USDA is issuing "surprising" estimates.]
"There is some concern in Argentina about the dry conditions prevalent in some of the major growing areas," Vic Lespinasse, at GrainAnalyst.com, said.
"Meteorlogix Weather is forecasting mostly dry conditions the next five-seven days in the main grain areas."
Analysts at Oil World on Tuesday restated their concerns over the drought, which prompted them last week to slash by 2m tonnes, to 50m tonnes, their forecast for the country's soybean crop.
Crop losses could prove even worse unless weather conditions improve over the next three to six weeks, the German-based analysis group said.
USDA soybean forecasts, 2009-10 (change from Oct estimate)
US output: 90.3m tonnes: (+1.9m tonnes)
Brazil output: 63.0m tonnes (+1m tonnes)
Argentine output: 53.0m tonnes (+0.5m tonnes)
Global output: 250.2m tonnes (+4.2m tonnes)
Global stocks at year end: 57.4m tonnes (+2.6m tonnes) [Key number!]
[If the USDA hadn't raised global output by 4.2m tons, global ending stocks would be NEGATIVE 1.6m tons (2.6 — 4.2)]
World Soybean Production
Below are the latest numbers from the USDA.
(Million metric tons)
Bloomberg reports that soybean buyers will rely 'heavily' on South America in 2010.
Soybeans Will Rely 'Heavily' on South America in 2010, FAO Says
By Matt Craze
Nov. 9 (Bloomberg) -- Soybean buyers are relying "very heavily" on bumper harvests in Argentina and Brazil to cover their needs for the crop used as animal feed next year, according to the Food and Agriculture Organization.
"Really only that crop will allow us from March onwards to talk about ample, sufficient supplies," Peter Thoenes, a senior economist at the organization known as the FAO, said in an interview in Santiago on Nov. 6.
Rising fertilizer prices may reduce yields in Brazil as farmers seek to cut costs, Thoenes said. In Argentina rain is needed to replenish soil moisture after the country suffered its worst drought in a century earlier this year, the Buenos Aires Cereals Exchange said Nov. 4.
Damage to South America's crop would have "price repercussions," boosting the cost of the oilseed used to feed pigs and chickens in Asian countries. South America's crop is collected starting in January.
Soybean demand will increase next year as a recovery in the global economy boosts use in emerging countries for livestock, Thoenes said. Demand for oil extracted from the soybeans will increase as governments in Europe and South America enforce new rules to blend vegetable oils with diesel, he said.
My reaction: Drought is threatening Argentinean soybean crop for second year.
1) About 90 percent of Argentina is affected by the current drought, and the situation is being aggravated in certain provinces by the spread of forest fires.
2) Some cities have decided to ration drinking water, a move with negative impact on agriculture.
3) In the northern province of Tucuman residents have been waiting for it to rain for seven months.
4) A lack of rainfall is beginning to erode Argentina's soybean prospects for a second season, with analysts at Oil World citing "unfavourably dry conditions" for a 2m-tonne cut to their harvest forecasts.
5) Argentina Dryness is delaying soybean planting and will harm yields if it continues.
6) The low quality of seed will also likely reduce yields of Argentinean soybean harvest.
7) Analysts have expressed surprise at this month's 500,000-tonne upgrade to 53.0m tons in Washington's forecast for Argentine soybean production.
Conclusion: In addition to greatly overestimating US soybean production, the USDA is also overestimating Argentina's soybean production.