Weather factors in South America: Drought in Argentina and excess rainfall in Brazil weigh on markets
Adverse weather conditions in South America affect the agricultural market. Excess rainfall continues in Brazil, hampering the harvesting of second-crop soybeans and corn, while crops in Argentina are suffering from a lack of moisture, reducing soybean and corn yield potential and keeping prices high.
Rainfall continues in central and northern Brazil, while the south continues to be deficient, weather forecasts for next week also show similar conditions. If the delay in corn planting continues, it could cause safrinha corn crops at pollination to enter the dry season in May-June, which could result in lower yields.
At the end of last week, only 17% of Brazil's soybean crop had been harvested, down from last year's average of 30%. Only 25% of corn has been sown, while 42% was already planted a year ago.
In Brazil's largest corn producer, the state of Mato Grosso, about 34% of the corn area is planted, which is less than last year (55%) and the five-year average (42%). Brazil's No. 2 safrinha corn producer, Paraná state, planted just 12% of its corn, down from a year ago (28%) and the average (23%).
Brazil's southernmost state, Rio Grande do Sul, is experiencing a drought that is also negatively impacting soybean crop potential.
The AgRural agency lowered its forecast for soybean production in Brazil to 150.9 million tons (USDA estimate of 153 million tons) due to projected losses due to excess rainfall and drought in the south of the country.
In Argentina, the rains coming from the central part of Brazil reach only the northern regions of the country and do not reach the main areas where crops are grown. There have been some showers this week that have brought temperatures down slightly to normal, but next week is forecast to be precipitation-free with above-normal temperatures.
According to the Buenos Aires Stock Exchange (BAGE), the condition of the soybean crop deteriorated in the previous week from 52% to 44% rated as good and excellent, compared to 77% a year ago. And the condition of corn crops decreased from 66% to 55% rated as good and excellent, compared to 74% a year ago.
The U.S. has generally seen mild weather with plenty of precipitation, but another cold wave of precipitation is expected next week.
The central plains saw widespread showers and snow this week (in Colorado, Kansas and southeast Nebraska), which will improve drought conditions, but more precipitation is needed.
According to the estimates of the Rusagrotrans analytical center in the central regions of the Russian Federation this season, winter crop crops on 6% of the area may die due to "the worst phenomenon that can happen to winter crops - the ground ice crust" on the fields, which is formed due to the temperature drop from minus at night to plus during the day .
According to the Ministry of Agriculture, last year, 17.7 million hectares of winter crops were sown for this year's harvest, which is less than 18.4 million hectares the year before. The share of crops in good and satisfactory condition is estimated at 95%.
Due to the weather situation in the center and partly in the Volga regions, Rusagrotrans lowered the forecast for the wheat harvest in the Russian Federation in 2023 from 83.5 to 81.5 million tons, while in 2022 102 million tons were harvested.
