Argentina's parched soybean and corn crops got a good soaking early Wednesday, bringing relief to worried farmers and international grain markets that have seen sharply rising prices over the past six weeks amid a drought.
Yields have already been affected, but Wednesday's storm will go along way to stemming the decline.
Argentina is the world's second-leading corn exporter and the third biggest soybean exporter behind the U.S. and Brazil.
Argentina leads global soymeal and soyoil exports.
Last week, AgriPac Consultores analyst Pablo Adreani said that Argentina's soybean production was unlikely to top 40 million metric tons, down sharply from initial estimates of around 55 million tons, but raised his forecast to 43.9 million tons on Wednesday due to the showers.
Panagricola analyst Ricardo Baccarin said that some areas were still dry but "the panorama has changed a lot in the last five days." The showers "brought relief and, for now, are preventing greater losses than those already suffered." Baccarin estimated soybean production of 47 million metric tons.
While the showers came just in time to save the flowering soybeans, the corn crops were hit hard by drought through December. Baccarin estimates corn production of 20 million tons, while Adreani expects just 18.3 million tons. Before the drought, production had been expected to hit a new record of over 26 million tons.
While the dry weather blamed on the La Nina weather phenomenon hit the corn and soybean crops hard, the wheat crop, which matures earlier, was spared and yields are very high.
On Tuesday, Agriculture Minister Julian Dominguez said that wheat production is likely to top 14 million metric tons this year. That's up sharply from the 9.6 million tons grown last season. Seven million tons have already been cleared for export, the full amount expected to be allowed from this crop, Dominguez said according to the government's official press website.
Argentina tightly regulates wheat and corn exports to ensure domestic supply and keep down local prices.
Despite Dominguez's assurances, farmers say that the government continues to stall wheat export permits and launched a one-week strike on Monday to protest the export controls.
Estimates for Argentina's 2010-11 crop production in million of hectares (HA) or millions of metric tons (MT) (One hectare equals 2.47 acres):
Wheat Soy Corn Sunseed Ag Ministry 13MT 52MT 26MT 2.5MT USDA 14MT 50.5MT 23.5MT 2.8MT B.A. Cereals Exch 15MT 47MT 20.35MT 2.7MT Rosario Grain Exch 14MT 49.5MT 21.3MT --Argentina's historical production in millions of metric tons, according to the U.S. Department of Agriculture:
Wheat Soy Corn Sunseed 2009-10 9.6 54.5 22.5 2.3 2008-09 10.1 32 15 2.9 2007-08 18.6 46.2 22 4.65 2006-07 16.3 48.8 22.5 -- 2005-06 13.8 40.5 15.8 --
