Argentine Soy Said Hurt By Dryness

Dry weather and high temperatures have combined to cut the forecast for Argentina's 2004-05 soybean crop by 1 million metric tons, the Argentine consulting firm Agripac S.A. estimated last week, according to a Dow Jones News Service report.

"The lack of rain and excessive temperatures during the first week of January have caused irreversible losses in a good part of the production zone," Agripac said. "There could be rain this weekend, but the losses are already there. These losses are a guarded secret that nobody is talking about. If it doesn't rain abundantly in the next 15 days, the losses will be even greater."

Around 3 million hectares, or roughly 20% of the total planted area of soybeans, have been at least moderately affected by the drought, according to Agripac. Some 367,000 hectares (907,000 acres) have already been completely lost.

The next few weeks will determine Argentina’s soybean production as much of the crop is now entering the flowering stages, the firm said. "Each week in which it doesn't rain from now on could cause 1.5 million tons worth of losses. The situation is very critical and can only be reversed with abundant rain over the next 15 days."

Agripac is now estimating Argentina's 2004-05 soybean output at 38 million tons, down from 39 million previously. The USDA sees Argentine production at 39 million tons. The Agriculture Secretariat has forecast production in a range of between 31 million tons (worst case) and 39 million tons (best case), with the most probably result being a crop of about 35 million tons.

Editors note: Richard Brock, The Corn and Soybean Digest's Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.

To see more market perspectives, visit Brock's Web site at www.brockreport.com.