The drought in the Argentine grain zone will last until the end of February, which will reduce the yield of crops such as corn and soybeans in the 2017/18 season. Such forecast was made on Wednesday by meteorological agency Applied Climatology.
According to the statistics of meteorological observations, March in Argentina is a rainy month, but so far medium-term forecasts are not very promising.
The USDA reduced the forecast of corn production in Argentina from 42 MMT to 39 MMT, and the forecast of soybean production from 56 MMT to 54 MMT. The forecast of the Buenos Aires Grain Exchange on soybeans is even more pessimistic - 50 MMT.
Traders are in tence, as drought problems in Argentina continue to raise prices for soy and soybean meal. Soybean price beat a new record of 10.2-½ dollars per bushel, while the meal reached 373.5 dollars per ton, which is a record since July 2016. Argentina is the world's largest exporter of soy flour, which is used as feed for livestock, and the third largest supplier of soybeans. It is also the third largest exporter of corn.
As estimates for the Black Sea nation’s harvest keep growing, so does the outlook for exports. Export prices for Russian wheat continued rising last week and reached the highest level since November 2015.