Argentine growers are set to plant corn and soy under ideal conditions over the next two months thanks to record August rainfall that has raised hopes the country's harvest could bolster global grain stocks depleted by the worst US drought in decades.
The dry spell in the US Midwest and poor crops from the Black Sea bread basket have lifted prices of corn, wheat and soybeans. With fear rising of a food crisis, the world is looking to Southern Hemisphere producers Argentina, Brazil and Australia to replenish shrinking grains reserves.
Argentina is the world's second biggest corn exporter after the United States and farm areas there have been lashed by 60 to 160 millimeters of rain in the first 21 days of this month versus an 10 to 15 millimeters a year earlier. "The corn planting season will start with a full tank," said Tomas Parenti, an agronomist at the Rosario grains exchange. "Soils will have very good moisture reserves going into the growing season."
Growers will be able to sow corn in the optimum September 10-20 planting period, said German Heinzenknecht, meteorologist at the Applied Climatology Consultancy. "The central part of the corn belt - eastern Cordoba province, Santa Fe, Entre Rios and northern Buenos Aires - are very well positioned for planting," he added.
A sowing window widened by favourable weather increases yield expectations by giving growers more time to stagger their crops, reducing weather-related risks later in the season. Argentina is also the world's top exporter of soyoil, used in the booming biofuels sector, and of soymeal, used as cattle feed in Europe as well in China, where the expanding middle class in the world's second largest economy is fast acquiring a taste for beefsteak.
US soybeans rose on Monday, reaching contract highs on shrinking soy supplies after the worst drought in over a half century will likely slash the American harvest. World corn prices have also risen mightily over the last two months. The US Department of Agriculture predicts Argentina's 2012/13 soy crop will be up 34 percent from the previous season to 55 million tonnes, while the corn harvest is seen up 33 percent to 28 million tonnes.