Saturday, January 7, 2012

Clock ticking for rains to save Argentine soy crop

Hugh Bronstein in Reuters: Unrelenting sun in Argentina has scorched as much as a fifth of its corn crop and the drought will start biting into the country's vast soy harvest unless rains come to the rescue this month or next.

Benchmark Chicago corn and soybean prices have both rallied more than 10 percent in the past three weeks as a hot, dry southern hemisphere summer has roasted grain fields across Argentina's legendary Pampas farm and cattle region.

Argentina is the world's second-largest corn exporter and third-largest soybean seller. So with rising food prices threatening to push more people around the world into poverty and hunger, global markets are watching the South American country's spotless blue horizon for signs of rain. The fiscal health of Argentina's government also hinges on revenue from the country's biggest export, soy.

Late-season corn planting has ground to a halt in Argentina while soy farmers have started to compare this year to the nightmarish drought of 2008/09, which cost them 30 percent of their harvest. That year, corn growers lost 40 percent of their crop.

...The outlook for soybeans, Argentina's larger and more essential crop, remains up in the air. The country exports about half of the world's soyoil, used for cooking and in the booming international biofuels sector...

A soy field in Zarate, Provincia de Buenos Aires, Argentina. Shot by Maggilautaro, Wikimedia Commons, public domain

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