Christmas rainstorms in Argentina further delayed soy and corn planting, keeping markets guessing about whether the grains powerhouse can produce enough this season to help bring high-flying global food prices down to earth.
The South American country is the world's No. 2 corn exporter after the United States and the No. 1 soyoil and soymeal supplier. But sowing in the central Pampas farm belt lags last season's tempo by about 20 percentage points, said Tomas Parenti, an agronomist with the Rosario grains exchange.
Up to 100 millimetres of rain fell late on Monday and early Tuesday, forcing some growers to park their seeding machines again, lest they sink in the mud. Any more harsh rains at this point – following an unusual August-to-October wet spell that turned prime Argentine farmland into unplantable mush – will add to the problem, Mr. Parenti said.
"There is excessive moisture in low-lying areas throughout the central farm belt," he added, referring to an area including parts of Buenos Aires, Santa Fe and Cordoba provinces. "Fields located in the same area but at higher elevation are in good shape. We're not expecting a lot of rain over the week ahead but if we get any surprises, anything over 40 or 50 millimetres, it will worsen the problem."
Argentina's main grains port of Rosario, situated along the Parana River and offering access to the shipping lanes of the South Atlantic, has received almost twice its normal rainfall this year. Soggy conditions on the Pampas are bad news for consumer nations looking to Argentina for the supply jolt needed to soften food prices squeezed higher this year by dry crop weather in breadbaskets Russia, the United States and Australia.
Benchmark Chicago soy futures are up 20 per cent over the past 12 months, with corn up 9 per cent and wheat 22 per cent. Global food markets face further volatility in 2013, as stocks and supply of key cereals have tightened, the United Nations food agency said this month.
The corn- and soy-growing town of General Villegas in northwest Buenos Aires received 50 to 100 mm of rain on Dec. 24 and 25, said Dante Romano, farm expert at the Liberty Foundation, a pro-business think tank in Rosario. "This aggravated the flooding and it will take a few days for planting to get back on track.
"Several days of sun are on the way. But whatever heavy rain falls at this point could suspend seeding again. A lot of fields that would normally be seeded by this point in the season have not been touched yet."
Farm towns such as Marco Juarez in Cordoba province and General Pinto in Buenos Aires are among those that have not had enough sunshine to provide the stable topsoils needed to allow farmers to bring seeding machines, which weigh about 30 tonnes fully outfitted, onto their fields. The rains have also slowed 2012-13 wheat harvesting, while Mr. Romano and other analysts start to adjust their 2012-13 soy and corn crop expectations to factor in waterlogged conditions.
The Agriculture Ministry on Thursday cut its estimate for 2012-13 wheat production by 5 per cent to 10.5 million tonnes, which is still higher than leading private forecasts but reflects damage caused by the wet weather. The Buenos Aires Grains Exchange expects farmers to harvest 9.8 million tonnes of wheat, while the Rosario exchange sees the crop coming in at 9.5 million tonnes.
Rosario sees 53 million tonnes of soybeans produced this season and 24 million tonnes of corn. The Buenos Aires exchange has not yet issued 2012-13 corn and soy projections.
With files from Maximilian Heath.