Argentina's soybean planting pace improves on rains but dry conditions prevail

New Delhi — Argentina's soybean planting pace improved on the back of rain during the week ended Dec. 5, although the overall progress was still below average due to a severe drought, which made soil too dry to plant soybeans in late-October, according to a Buenos Aires Grain Exchange, or BAGE, report Dec. 10.

Out of the total projected acreage of 17.2 million hectares for 2020-21 crop year (November-October), Argentinian soybean farmers have managed to plant 57.1% of the area as of Dec. 9, 4.4 percentage points lower than last year, BAGE said.

This delayed pace of Argentinian soybean planting is expected to support US soybean futures prices, which are trading at a four-year high for the past couple of weeks, analysts said.

The January soybean futures contract was trading at $11.5810/bu on the Chicago Board of Trade at 12:21 pm CT (1821 GMT) Dec. 11.

The biggest weekly gains in planting progress were registered in the Central-North of Cordoba and the Central-East of Entre Rios on sufficient rains, BAGE said.

According to BAGE, rains in the coming weeks are going to be crucial as the soybean crop requires ample moisture levels during development and pod filling.

However, dry weather is expected in the coming days, which could harm the soybeans crop.

Dry weather across Argentina over the past week has allowed soil moisture to decline across most of the major growing areas, although dryness is mostly limited to southern growing areas such as southern Cordoba, southern Santa Fe, Buenos Aires, and La Pampa, weather agency Maxar said.

Light showers are expected across southern and eastern Argentina over the next few days, which may lead to minor improvements in soil moisture, although more will still be needed to end the dryness in Buenos Aires.

Mostly dry weather is expected in western Argentina, which will increase dryness and stress on corn and soybeans, the weather agency said.

LA NINA

La Nina-induced drought concerns linger over Argentinian soybean farmers as the weather phenomenon has brought irregular rains and droughts in the country in the past few years.

Weather in December and January are crucial for Argentinian soybeans, with ample rains required across the beans acreage, while dry weather could hamper yield prospects.

Historically, La Nina has brought extremely dry weather in Argentina between late-November and January, which doesn't bode well for the first and second soybean crops.

Argentinian soybean yields have declined by 2%-6% during La Nina years, analysts said. Current year's La Nina has been predicted as one of the strongest in decades by climatologists.

For the 2020-21 crop year, Argentinian soybean production is forecast around 46.5 million mt, 2.5 million mt lower than last year, according to average analyst estimates.

However, if La Nina's impact is factored into the forecast, Argentinian soy production could decline to as low as 45 million mt in 2020-21, analysts said.