The drought in Argentina is causing several analysts to lower expectations for the corn and wheat harvest. Some of the country's agricultural land is affected by a severe lack of rainfall and the upcoming elections will also affect the South American grain market.
Soy, corn and wheat are the major arable crops in Argentina. Corn is sown in September, soy is started 1 month later and wheat is harvested around the turn of the year and sown in June and July. The dry situation is most pressing for wheat and corn. The sowing of corn has been delayed due to a lack of rain.
However, the situation in the country is divided, writes Reuters news agency. About 20% of the agricultural land in the Pampas is experiencing drought. As a result, less wheat and corn is expected. Of these crops, 80% are in good condition, but 20% are in average to poor condition.
Soy a safe haven
Arable farmers are more likely to switch to soybeans, because they can be sown later and are a safer crop. The country recently concluded a trade deal with China. The ongoing trade war between the United States and China is therefore purely positive for Argentina and Brazil. They see export volumes increasing enormously. The upcoming elections in Argentina are also influencing arable farmers' choices.
Sufficient rain should fall in the coming weeks to ensure that the wheat ears become well filled. Now that rain is on the weather maps for the coming weeks, the situation is not yet critical, but it is a point of concern.