Argentina rains boost grains producers amid global food price rally

RIO DE JANEIRO, BRAZIL – Abundant rains in recent weeks in Argentina have lifted forecasts for soybean and corn harvests, according to a revised outlook by the Rosario grains exchange, a major boost for the grains producer amid a global food price rally.

The exchange raised its forecast for the 2020/21 soybean harvest to 49 million tons, versus 47 million previously, and for corn to 48.5 million tons from 46 million earlier, when dry conditions had raised concerns over crops.

The exchange said in the monthly report sent to Reuters early on Thursday that the rains in recent weeks had been a “turning point” in the season and banished any fears about a repeat of the 2018 drought that caused heavy crop losses.

“The specter of the 2018 productive disaster remains behind us,” the exchange said in the report.

Argentina is the world’s top exporter of soybean oil and meal, and the third largest of corn, but lower rainfall in recent months due to a moderate La Niña weather phenomenon had caused uncertainty over harvests from the country.

“Rainfall toward the end of January has improved the condition of soybean fields over much of the central agricultural area,” the Buenos Aires Grains Exchange said in its weekly crop report on Thursday.

“Late planted commercial-use corn is in good condition in the central agricultural area. At the same time, the harvest of early-planted corn in Santa Fe and Entre Rios provinces show yields that are below the expectations that were set at the beginning of the season,” the exchange said, maintaining its 2020/21 corn and soy harvest projections unchanged at 46 million tons each.