Argentina’s corn and wheat harvests, and exports, will fall short of expectations thanks to dryness damage, a US report said, warning that La Nina is “having a significant effect”.

The US Department of Agriculture’s Buenos Aires bureau cut to 18.50m tonnes its forecast for Argentina’s wheat harvest this year, 1.0m tonnes below the USDA’s official figure, citing a hit to sowings hopes from “very dry weather”.

“Most of Argentina’s crop land is suffering a significant dry cycle, with more than 70 days without rain,” the bureau said, cautioning of the potential for a further downgrade to plantings hopes beneath the five-year low of 6.0m hectares already accounted for.

“If it does not rain over the next two weeks, the acreage could drop even more than the 8-10% that has already been cut.”

‘La Nina having a significant effect’

For 2022-23 corn too, the bureau warned of the threat posed by the dry weather, which it linked to the persistent La Nina conditions.

“Yields are expected to be lower than the trend as this is the third [calendar] year in a row which La Nina is having a significant effect on Argentina’s crop area,” the bureau said.

The impact was evident in “a dry environment and some days with very high temperature”.

The comments come amid mounting expectations that La Nina conditions which have reined since 2020, and have a history of bringing dryness to Argentina, will extend into 2023.

The US Climate Prediction Center two weeks ago said that “La Niña is favoured to continue through 2022”, with a 56% chance in the December-to-February period, while the Japan Meteorological Agency rates at 60% the likelihood of La Nina in the September-to-January period,

Scrimping on fertilizers

Crop production prospects are also being undermined by reduced use of fertilizers in the face of high prices, with bureau noting observations from some contacts that reduced nutrient applications have rendered wheat crops more vulnerable to dryness.

For corn, “some farmers are expected to use lower volumes of fertilizers due to their high cost,” the bureau said, reporting that phosphorus values remain “very high”, even if nitrogen values have fallen back by about 20%.

The reduced production outlook will limit Argentina’s corn exports in 2022-23 to 38.8m tonnes, 2.2m tonnes below the USDA’s official forecast, the bureau said, noting too government export controls aimed at ensuring that the “domestic market remains well supplied”.

‘Could be record large’

Wheat exports will, at 12.35m tonnes, fall by nearly 4m tonnes year on year, and come in 1.15m tonnes below the USDA’s official forecast, and losing a “good opportunity to expand exports at a moment in which world supply and demand are tight primarily due to the Ukraine-Russia war.

“The combination of local policies and harsh, dry weather has limited this possibility.”

Fortunately for Brazil, the top importer of Argentine wheat, it is expecting a bumper wheat harvest this year, thanks to enhanced sowings encouraged by high prices, and with decent soil moisture levels.

Southern Brazil has a looser link to dryness in La Nina periods.

“Brazilian wheat production in 2022 could be record large surpassing 10m tonnes,” said Dr Michael Cordonnier, noting estimates from Safras e Mercado of a 16.6% rise in Brazilian sowings to 3.18m hectares, “the largest wheat acreage since 1990”.