'Drastic change' toward dryness threatens Argentine corn yields -analysts

BUENOS AIRES, Jan 4 (Reuters) – Better-than-expected rains boosted Argentine wheat production this season but the weather panorama has changed “drastically” since mid-December, with dryness threatening corn crops just as they enter critical development stages, analysts said.

Indeed, analysts might start marking down their record high 2021/22 corn harvest estimates if it gets too dry next month.

“There is a risk of having to lower our corn production projection,” Esteban Copati, head analyst at the Buenos Aires Grains Exchange, said on Tuesday. The current forecast is for a record 57 million-tonne crop.

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“But we can’t confirm anything yet because late-planted corn could compensate for these potential yield losses in early-planted corn, as has happened in other seasons,” Copati added.

The South American country is the world’s second biggest corn exporter and top supplier of soymeal livestock feed, used to fatten hogs and poultry from Europe to Southeast Asia.

Argentine farmers have planted more than 81% of the expected 2021/22 soy area and 70% of corn, according to a recent exchange report. It expects a 2021/22 soy harvest at 44 million tonnes.

Forecasts earlier in the season warned that the La Nina climate phenomenon might bring dryness to Argentina earlier in the season. “But it seems that La Nina finally arrived at the end of the calendar year, when early corn is at critical stages,” Copati said. That could affect some of Argentina’s best corn land.

Argentine wheat crops, currently being harvested, received very good rainfall in the second part of 2021, pumping yields higher and prompting the exchange to raise its crop estimate three times from the end of November to the end of December to a record 21.5 million tonnes.

Growers, however, remain worried about corn.

“The lack of rain is awful,” said Santiago del Solar, who farms in the bread-basket province of Buenos Aires.

“We assume that early-planted corn yields will be half of what we expected. There is still hope for soy if it rains normally through the rest of January and February, but we’re worried about La Nina,” del Solar said.

In the last 15 days of 2021 there was a “drastic change” in the weather, the Rosario grains exchange said in a report.

“Rains that had fallen almost weekly stopped and temperatures started to climb higher than 40 degrees Celsius (104 Fahrenheit),” it said.

“Early corn planted in the provinces of Santa Fe, Cordoba, Entre Rios and Buenos Aires is in a particularly delicate situation, and in the eastern part of the country, yield losses ranging from 20% to 40% are confirmed,” the Rosario report said.

“We may be facing a serious problem if the forecast of scant rains during the first half of January is confirmed,” it added.