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December 8, 2016

Dryness in Argentina Beginning to Worry Farmers and the Market

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Farmers in Argentina are becoming more concerned about the developing dryness in the central and southern production areas of Argentina. The primary areas of concern are the provinces of Buenos Aires, La Pampa, southern Santa Fe, and southern Cordoba. These are some of the prime corn growing regions of Argentina. The weather in Argentina was generally wet during the month of October, but the weather turned dryer during November and now the forecast is for dryer than normal weather again during the month of December as well.

Currently in Argentina, approximately 45% of the 2016/17 corn crop has been planted compared to an average of about 54%. The farmers in Argentina are expected to plant approximately 4.3 million hectares of corn in 2016/17. The corn in Argentina is planted in two phases. The first phase is planted during September and October and then the farmers general skip planting corn during November and resume the second phase of planting during December and January. They do not like to plant corn during November because it would then be pollinating during January which is normally the hottest time of the year.

The corn planted during the first phase is approaching pollination and approximately 25-30% of the corn in Argentina will be pollinating during the month of December with most of that pollinating during the second half of the month. The next big month for pollination will be February when the corn planted during the second phase approaches pollination. The most sensitive time for a corn plant is during pollination and hot and dry conditions during pollination can result in significant yield losses.

Generally, the dryer weather thus far has been in the central and southern production regions of the country and in these dryer areas, there are still approximately 750,000 hectares of corn left to plant. Farmers in Argentina have been planting their corn later and later in recent years, but the planting this year is later than normal and if the dryness persists during December and January, farmers may not plant all their intended corn acreage.

Farmers in Argentina may be reluctant to plant an expensive crop of corn if the soil is already short of moisture and there are limited rains in the forecast. In a worst case scenario where the rainfall is limited during both December and January, it is possible that maybe as much as 250,000 hectares of corn may not get planted. The corn most at risk would probably be corn scheduled to be double-cropped after the wheat, barley, or sunflowers are harvested.

An even bigger potential risk for the corn crop in Argentina would be yield losses due to potentially dry conditions going forward. The meteorologists in Argentina are forecasting a dryer than normal summer growing season, but the farmers in Argentina are hoping they are wrong.