Sep 21, 2022
Slow Start to Early Corn Planting in Argentina
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Over the weekend, parts of Argentina received their first significant rainfall in several months, but many dry areas remain. The core production area of Argentina has received very little rainfall over the last four months and that follows a dry summer and fall. In the municipality of Pergamino in northern Buenos Aires for example, they received only 6 mm of precipitation (0.2 inches) from June through August, the lowest since 1933. Temperatures have also been colder-than-normal with numerous frosts as recently as last week.
The forecast is calling for light and scattered showers this week which will only provide partial relief to the dry conditions as corn planting begins.
It is time to start planting corn in Argentina, but dry conditions have kept the planters parked. Very little if any corn has been planted in Argentina as of late last week compared to about 2% last year and 4% average. In some of the core production areas, the corn is usually about 30% planted by now, but until they receive significant rain, farmers will be very reluctant to plant corn especially since the cost of production has increased this year.
Weather experts in Argentina are raising fears of a new "great drought" due to the third straight year of La Nina. I think it is a little premature to say that, but if the weather in Argentina does not improve by early October, it is entirely possible that farmers may decide to switch some of their intended corn acreage to soybeans instead. Corn is planted first in Argentina and farmers usually start planting their soybeans about mid-October.
Corn in Argentina is planted in two phases with the first phase starting in September and ending by the end of October. The second phase of corn planting starts in early December and ends about mid-January. The first phase usually accounts for between 40 to 45% of the corn acreage with the second phase accounting for 55 to 60% of the corn acreage.
A potential switch could also occur due to the recent preferential exchange rate the government issued for soybeans as an incentive for farmers to sell more of their 2021/22 soybean production, which they did in a big way. In farmer's minds, they are probably thinking that if the government did it once for soybeans, they might do it again next year. There was no "special" exchange rate issued for corn, so that is maybe an insight into the government's preference for soybean production. Export taxes on soybeans and the products are a major source of revenue and hard currency for the government.