The Rosario Stock Exchange (BCR) reduced its 2020/21 soybean harvest production forecast to 45 million tons, from the previously estimated 49 million, due to a drought that affects important central agricultural areas.

“February and the first ten days of March did not leave significant rains in much of the central area, especially the east. There are very serious losses in yields and sown area”, the BCR said in its weekly crop report, which compared the water shortage with severe drought in 2017/18.

Argentina is a leading world food exporter and although the weather has been an adverse factor in recent months, thanks to high international grain prices, the country would register the best harvest measured in foreign exchange earnings in its history.

However, pessimism is beginning to grow among analysts who have seen the scenario worsen in the last week.
“It did not rain, it was hot, the high temperatures accelerated the deterioration and we are moving towards a homogeneity of conditions, but unfavorable. The hydric condition is rapidly losing and that has a direct impact on the cultivation condition”,  Esteban Copati, chief of Agricultural Estimates of the Buenos Aires Cereal Exchange (BdeC) said.

The latest BdeC estimate places Argentine soybean production at 46 million tons. However, Copati pointed out that “the scenario has been getting worse and it will be difficult for us to sustain the production projections that we maintained even until the last report”.

Meanwhile, Germán Heinzenknecht, a meteorologist at the Applied Climatology Consultancy, does not foresee a climate improvement in the short term.

“The campaign is closed in terms of the possibility of rain aid that can improve yields, it is very unlikely that it will happen. March is well on the way to repeating the poverty of (rains of) February and the drought has a high chance of consolidating”, Heinzenknecht said .