ARGENTINA DROUGHT TAKES TOLL ON CROP ESTIMATES

Trade expectations for corn and soybean crops in Argentina continue to fall as the country experiences one of its worst droughts in 60 years. The first full week of March 2023 continued the trend of hot and dry weeks in Argentina’s main soybean-producing regions. This is one of the hottest and driest first full weeks of March in 30-plus years, according to data from WeatherTrends360.

Conversely, there has been too much rainfall across portions of central and south-central Brazil where the planting of the second corn crop, safrinha, has been very slow. A relatively large portion of the crop is being planted outside of the ideal planting window, which makes the crop more susceptible to volatile weather such as dryness and early frost. The rain was heaviest in the northern half of Mato Grosso and this was the sixth wettest first full week of March in 30-plus years for the state, according to WeatherTrends360.

The weather woes continue into the second week of March 2023. In Brazil, the wet weather pattern is expected to continue, further delaying fieldwork. However, there could be an increased chance of precipitation in Argentina, especially later in the week.

On a related note, the United States’ Climate Prediction Center has declared, as of last week, that La Niña has officially ended. This rare, three-year La Niña event has been largely responsible for the dryness seen in Argentina and southern Brazil. While it may be too late to salvage yields this season, the decay of La Niña and likely rise of El Niño later this year should result in less weather headwinds for these growing regions in the 2023/2024 season.