Consumer nations have been counting on Argentina, the world's No 3 soybean exporter, to make up for grains shortfalls caused by dry weather in breadbasket producers Russia, the United States and Australia. But with floods criss-crossing the Pampas plains, some farmers have not been able to get to their fields, much less drive their seeding machines - which weigh about 30 tonnes fully outfitted - over the lands without getting stuck in the mud.
Soy planting progressed 8.7 percent over the week through Thursday to 54 percent of the total projected 19.7 million hectares to be planted with the oilseed this season, the exchange said in its weekly report. The pace of seeding lags last season's "due to interruptions caused by constant rains that have covered wide parts of the farm belt," it said.
Even normal showers at this point play a negative role by sustaining waterlogged conditions. Forecasts of heavy rains for the end of this week tuned out to be accurate when Buenos Aires was brought to a soggy standstill on Thursday. Pedestrians ended up wading through waist-high floods in heavily populated urban areas. Police in the worst-hit neighbourhoods fastened ropes across intersections to steady afternoon commuters as they crossed.
The Agriculture Ministry also released its weekly crop report on Thursday, confirming the delays in soy planting. Argentina is the world's top exporter of soy byproducts, such as soymeal animal feed and soyoil used in the biofuels sector. "Soy fields that are already growing have been losing hectares to flooding, and there's no reason to think the weather will improve," the ministry report said.
Argentina's soy woes have driven Chicago futures higher as markets factor in risk of prolonged supply constraints, which would squeeze food prices higher and drive inflation in countries already struggling with sluggish growth and high unemployment. Benchmark Chicago soy futures are up 24 percent so far this year, with corn futures up 15 percent and wheat 29 percent.
The US Department of Agriculture expects Argentina to harvest 55 million tonnes of soy, 11.5 million tonnes of wheat and 28 million tonnes of corn in the current 2012/13 crop year. But crops across the board have been knocked back in Argentina by excessive rains. The exchange said 55.1 percent of the 2012/13 corn crop has been seeded on a projected area of 3.4 million hectares, marking a lag of 14 points versus last season's tempo.
Argentina's wheat crop has been 36.2 percent harvested, the exchange said. The harvest advanced 10.5 percent during the week through Thursday, or 3.3 points behind 2011/12's pace. The exchange kept its wheat crop estimate unchanged at 10.1 million tonnes despite low yields reported for early harvested wheat in marginal areas because it believes that plants in the country's main wheat belt, in southern Buenos Aires province, developed in good condition and may remain healthy. "Nonetheless," the exchange said, "the harvest in the central wheat belt is to start in two weeks. If those yields come in below expectations, adjustments will have to be made to our production estimate."