The third bout of La Nina looks like being more severe than last year’s, the Rosario grains exchange said, as it slashed hopes for Argentina’s wheat harvest to a seven-year low, and cut its corn expectations too.

The equatorial Pacific oceanic Niño index (ONI), the primary measure of the El Nino-La Nina cycle, is showing a value of a negative 0.8, twice the reading a year ago as the La Nina returned for a second year, the exchange said.

“This gives serious indications that the intensity of this third Niña will not be mild like last year, but rather moderate,” it said.

The prospect of a raises the potential for more a marked iteration of the weather anomalies linked to La Nina, such as extreme wetness in eastern Australia and South East Asia, but dryness in Argentina, the southern US and often southern Brazil too.

‘Critical situation’

Argentina itself is already in the grips of a drought which has left the country looking at wheat production, from the forthcoming harvest, of 16.5m tonnes – a drop of 6.5m tonnes from last year, when weather was more benign, and the worst result indeed since 2015.

“A month ago, the production outlook was indicated around 17.7m tonnes,” the exchange said.

“But the month of September passed almost without rains like August and July in a good part of the Pampas region.”

The water deficit is deepening in particular in the north, centre and west of the country, with states including Córdoba, Chaco, Santiago del Estero, south of Santa Fe “the most affected” – besides the north of Buenos Aires, the top growing province.

“In the north of Buenos Aires… the lack of water is almost total since May 25 and the situation of the wheat is critical.”

‘Successive September frosts’

Adding to the setback to crops from dryness has been volatile temperatures, with the exchange noting “successive September frosts interspersed with temperatures that have exceeded 30 degrees Celsius”.

These conditions, coupled with the “very low relative humidity”, have “worsened” crop prospects, the exchange said, reporting that “2.5m hectare of wheat – 40% of the wheat planted – is in fair to poor condition”.

This rating may deteriorate further if dryness continues unbroken.

Outside Entre Rios and central and southern Buenos Aires, where rainfall has been more forthcoming, “the behaviour of the rains in the next fifteen days will be decisive to prevent losses from increasing”.

Corn, soy outlooks

The conditions have cut hopes for 2022-23 corn too, of which Argentina’s early sowings are in progress, with the exchange expanding by 200,000 hectares, to 600,000 hectares, its forecast for the year-on-year decline in seedings.

The revision, which left the sowings estimate at 8.0m hectares, reflects “the sustained lack of water over the last 36 months in the Pampas region… which has intensified in the last three seasons, and forecasts of a third consecutive Nina.

“The sector faces a major challenge, especially those that propose early sowings of corn.”

Indeed, the exchange forecast record sowings of late corn, as farmers bet on better conditions ahead, while cutting by 2m tonnes to 56m tonnes its production estimate.

Area will also be switched to soybeans, for which the plantings estimate was raised by 200,000 hectares to 17.0m hectares and signalling a 48m-tonne crop – up from 42.2m tonnes for 2021-22.