Argentina Exchange Cuts Corn Forecast But Rain Helps Crops

Argentina Exchange Cuts Corn Forecast But Rain Helps Crops

Surprisingly heavy rain storms soaked Argentina’s parched crops just in time over the past two weeks, stemming damage to corn and putting soybeans on track for a good season.

“It’s a tremendous relief,” Buenos Aires Cereals Exchange crop analyst Esteban Copati said in an interview.

The exchange cut its forecast for 2011-12 corn production to 21.3 million metric tons, down from 22 million tons estimated last week, but the recent showers have stemmed the losses, Copati said.

Early in the season, analysts had expected corn production of up to 30 million tons, but hot, dry weather in December and January baked many of the fields.

Corn planted early in the season was hit hardest by the drought during key growing phases, but some of those losses will be made up by high yields in the northern fields where planting happened later and got a good soaking, Copati said.

Argentina is the world’s second-largest corn exporter, and fears of a lingering drought in South America had helped buoy global prices.

The U.S. Department of Agriculture also cut its corn estimate for Argentina to 22 million tons, down from its forecast of 26 million tons last month.

Argentina’s corn harvest will start later this month and continue through June.

The storms also come as a blessing to the developing soy crop, which is entering key development phases and was desperate for a big drink.

“The surprisingly big storms were great,” Copati said.

Argentina leads global soymeal and soyoil exports, and ranks third in soybean shipments.

The exchange left its forecast for production at 46.2 million tons, but that could be upped if the weather continues to cooperate, Copati said.

The USDA trimmed its forecast for Argentina’s 2011-12 soybean production, pegging the crop at 48 million tons, compared to the 50.5 million tons estimated last month.

The soy harvest will kick off in March and extend through July.