The rains forecast for the next few days will be essential for soybeans to find a yield floor, and not continue with a deterioration process that further cuts production estimates.
According to the Rosario Stock Exchange (BCR), rainfall is expected between Sunday and Tuesday in the so-called core zone, which includes the north of Buenos Aires and the center-south of Córdoba and Santa Fe, which could leave accumulated between 40 and 60 millimeters in one of the regions most affected by the lack of water.
80% of the soybeans implanted in this productive region entered its critical state, which is the stage in which they begin to define their yield, for which the “need for water is urgent.”
“It will be very important if the rains that we are seeing occur. The issue is that there is great instability in the forecasts. We are talking about a rainy front on Sunday and Tuesday”indicated the person in charge of the Strategic Guide for Agriculture (GEA) of the BCR, Cristián Russo.
In this sense, Russo stressed that “it has to rain for the volumes we are estimating to be maintained. It is very difficult for the possibilities of improvements in the condition of the crops to occur, but if it did not rain, yields would continue to fall and new cuts would come “, he alerted.
The worst campaign of the last 15 years is expected
According to the BCR, the worst oilseed campaign for the region in the last 15 years is expected.
The stock exchange entity cut on Thursday the Estimated area for soybeans at 400,000 hectares “due to intense thermo-hydric stress” up to 4.3 million hectares, for which a production of 10.4 million tons is expected.
This panorama that occurs in the core region is also developed at the national level, where The Rosario Stock Exchange negatively adjusted the harvest forecast of the oilseed by 2.5 million tons to 34.5 million tons, a figure that, if materialized, will mean the lowest volume of the last 14 campaigns.
But it was not only the Rosario stock exchange that decided to cut production forecasts, but also the Buenos Aires Grain Exchange (BCBA) estimated downward the harvest, although milder than what was carried out by the BCR.
Thus, the BCBA cut the estimate for soybean production by three million tons, from 41 to 38 million, also as a consequence of the water deficit that still affects the country.
If this projection materializes, the 2022/23 campaign would be the lowest of the last five cycles, and would be 10 million tons below the first estimate made by the Buenos Aires stock exchange before planting began.
Besides, This figure is 5.3 million tons below the 43.3 million registered during the 2021/22 harvest.
Given this new production projection, the BCBA estimated that exports from the soybean complex will fall 18% compared to the previous cycle, equivalent to a decrease of US$ 4,516 million, going from US$ 25,017 million in the 2021/22 campaign to US$ 20,501. million in the current cycle.
Likewise, the Gross Agricultural Product (PBA) or the contribution of the oilseed chain to the economy will decrease from US$ 22,634 to US$ 16,862 million, while tax collection could be located at US$8,039 million against US$ 10,315 million the previous campaign.
However, the upcoming rains announced and the weather models continue to show a trend in which The La Niña climate phenomenon is in decline.
“The conditions are still consistent with the continuation of La Niña. But it is true that there is a definite trend towards full neutrality as of March,” the BCR said.
In addition, they noted that “the good news for February comes from the Atlantic. As it is positively influenced by the Brazil current, there is a positive anomaly in its surface temperature. At the moment this does not translate into better rains for the region pampean but, if this trend continues, the warmer waters reduce the probability of early and surprise continental cooling”.
