Drought is emerging in Argentina's biggest corn-producing regions.
Increasingly dry conditions in Cordoba, Buenos Aires, and Santa Fe provinces have driven Argentina's corn production forecast down 13% in the week ended Jan. 20, Gro's machine learning-based Yield Forecast Model shows. Gro's forecast now sits 27% below the USDA's latest projection and Gro expects the USDA will need to adjust its forecast lower in the February WASDE report.
Dry conditions linked to La Niña are dragging down yield prospects. Argentina’s corn crop is currently in the “silking” stage, and if hot and dry conditions impede pollination, some damage to the crop may be irreversible.
Argentina has historically been the world’s second- or third- largest corn exporter after the United States. A significant drop in Argentine production would put more pressure on the US and Ukraine to meet world import demand, especially following the loss of exportable supply from Brazil’s last crop.
Corn prices also could remain elevated for some time as the global supply and demand balance for the 2021/22 season tightens to a deficit. While US farmers would be incentivized to plant more corn, the US alone wouldn’t be able to significantly elevate the very tight global corn supply balances.
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