Bloomberg News

Corn Climbs as Dry Weather May Cut Harvest in Argentina, Brazil

January 06, 2012

Jan. 6 (Bloomberg) -- Corn and soybean futures climbed in Chicago, reversing earlier declines, amid speculation dry weather in Argentina and Brazil will cut production and prompt the U.S. government to reduce its outlook for global stockpiles.

Argentina’s corn crop is likely to miss government estimates on a worse-than-expected drought, corn-farming association Maizar said yesterday. The corn harvest in Rio Grande so Sul, Brazil’s most southern state, will be 25 percent lower than expected because of dry weather, the state crop research agency said yesterday.

“Rain is still expected for Argentina starting Tuesday and this is becoming very urgent, irreversible damage has already been observed, mainly in corn,” Paris-based farm adviser Agritel wrote in a note today.

Corn for March delivery rose 0.7 percent to $6.48 a bushel on the Chicago Board of Trade at 2:14 p.m. Paris time, and is headed for a 0.2 percent rise this week.

Argentina’s corn crop may be as low as 22 million metric tons as the La Nina weather event causes a “much worse” drought than expected, Martin Fraguio, executive director of Maizar, said yesterday. The U.S. Department of Agriculture forecasts the country, the world’s second-largest corn shipper, will harvest 29 million tons.

The corn harvest in Rio Grande do Sul will drop to 3.97 million tons or less from 5.78 million tons in 2011, less than the 5.3 million tons previously forecast, the state crop research agency known as Emater said in a report yesterday.

Soybeans for delivery in March rose 0.6 percent to $12.1675 a bushel, set for a 0.8 percent gain this week.

Argentina’s Soybean Crop

Argentina’s soybean crop, the world’s third-largest, may drop to 48 million metric tons this year from 49 million tons in 2011, Australia & New Zealand Banking Group Ltd. said today. The USDA last month forecast output would rise to 52 million tons, and will release its next outlook on Jan. 12 in Washington.

While rains forecast next week may help contain losses to the Argentine soybean crop, “prices will quickly build further if the outlook continues to show a lack of alleviating rain,” Victor Thianpiriya, an agricultural analyst at ANZ, said in a report e-mailed today.

Global soybean inventories may drop to 63.02 million tons, Allendale Inc. said in a forecast e-mailed yesterday. The USDA estimated in December that inventories will be at 64.5 million tons at the end of this season.

Rainfall Next Week

Argentina’s corn and soybean growing regions may get 12 to 50 millimeters (0.5 to 2 inches) of rainfall early next week, reducing the soil moisture deficit and aiding damaged crops, said Bryce Anderson, an agricultural meteorologist at Omaha, Nebraska-based Telvent DTN Inc.

“It will certainly be beneficial to crops,” Anderson said by phone today. Still, “the soil moisture supply is not going to be relieved or completely restocked with just one rain event.”

Wheat for March delivery gained 1 percent to $6.3525 a bushel in Chicago, trimming the weekly loss to 2.7 percent. Milling wheat for delivery the same month traded on NYSE Liffe in Paris added 1.4 percent to 196.25 euros ($249.92) a ton, gaining 0.5 percent this week.

--With assistance from Laura Price in Buenos Aires and Lucia Kassai in Sao Paulo. Editors: Sharon Lindores, John Deane

To contact the reporters on this story: Rudy Ruitenberg in Paris at; Luzi Ann Javier in Singapore at

To contact the editor responsible for this story: Claudia Carpenter at

The Aging of Abercrombie & Fitch
blog comments powered by Disqus