Rain slows Argentine corn sowing, soy starts soon

Reuters News
Posted: Oct 15, 2012 12:44 PM
Rain slows Argentine corn sowing, soy starts soon

By Hugh Bronstein

BUENOS AIRES (Reuters) - Rains that have slowed Argentine corn sowing are expected to give way to sunshine by midweek, setting the stage for easy planting of the country's key soy crop, climate experts in the grains-exporting powerhouse said on Monday.

Consumer nations hope the South American country will step in with ample corn, soy and wheat supplies to help soften prices squeezed higher this year by dry crop weather in heavyweight producers Russia, the United States and Australia.

"The rain this week will be concentrated on Monday and Tuesday, slowing corn planting in the province of Buenos Aires, Entre Rios, and part of Santa Fe," said Jose Luis Aiello, head of the Applied Climatology consultancy.

These areas form the heart of the Pampas farm belt. Measuring wider than the size of France, the Pampas is being counted on to help satisfy world food demand expected by the United Nations to double by 2050 as the global population heads toward 9 billion.

The early week storms should give way to four or five days of sun, helping farmers drain over-soaked fields and setting the stage for soy planting over the weeks ahead, Aiello added.

Low world stocks have pushed benchmark Chicago soy prices 25 percent higher this year, with corn up 15 percent and wheat jumping a whopping 30 percent. Investment funds are increasingly interested in the sector as global food demand rises.

Tomas Parenti, an agronomist at the Rosario grains exchange, said the delays seen in 2012/13 corn sowing are temporary and that it is too early in the season to fret about an excess of moisture hobbling soy planting.

"The net effect of all this water has been positive so far. Better too much rain than not enough. Of course that's hard to tell a farmer whose fields are flooded," Parenti added.

Argentina is the world's No. 2 corn exporter and the third biggest soybean supplier. It is also the No. 1 provider of soyoil, used to make biofuels, and soymeal, employed as cattle feed as far away as China, where the fast-emerging middle class is clamoring for beef steak.

Argentina's 2012/13 wheat is in its early harvesting stages. Crops are threatened in some low-lying areas of bread basket province Buenos Aires, where plants have started turning yellow as their roots gasp for oxygen. The sunshine expected later this week should help dry those inundated areas.

Looking further ahead, the El Nino phenomenon is expected to dump unusually high amounts of rain on the Southern Cone before the end of the year, when growers will again have to look out for flooding.

El Nino, characterized by warm ocean temperatures in the tropical Pacific, brings rain to South America's main grains belt. Its opposite, La Nina, makes for the kind of dry South American crop weather that parched Argentine soy and corn fields in December and January, drastically cutting 2011/12 yields.

The flow of grains from Argentina is also of interest to exporters such as Bunge Ltd and Noble Group Ltd, which operate gigantic terminals along the Parana River, leading to the shipping lanes of the South Atlantic.

The Buenos Aires Grains Exchange expects 2012/13 Argentine wheat production at 10.12 million tonnes, down 28 percent from last year, while the area seeded with commercial-use corn is seen falling 12 percent in 2012/13 from the previous season.

Farmers have shied away from both crops due to government-imposed export curbs that do not apply to Argentine soy. Local soybean harvest estimates for the 2012/13 season will come after planting starts.

(Reporting by Hugh Bronstein; Editing by Jeffrey Benkoe and Sofina Mirza-Reid)