Argentina is headed for its worst drought in three decades, and a downturn in crop production will likely slow the economic recovery in a country where corn and soybeans account for 36 percent of all exports, said Bloomberg. Separately, the International Grains Council estimated that world corn production will fall by 4 percent this marketing year, “mainly because of poorer maize output prospects in Argentina, Brazil, and South Africa.”
Although it’s often overshadowed by Brazil, Argentina is one of the leading wheat, corn, and soy exporters in the world. While the United States and Brazil dominate the global soybean market, Argentina is the world leader, by far, in soy oil and soy meal exports. It is usually the world’s No. 3 corn exporter and its No. 4 wheat exporter.
The Argentine soybean crop may be smallest since the record low of 39.9 million tonnes in 2009, said Bloomberg. The Buenos Aires Grain Exchange estimates the harvest at 47 million tonnes, and its chief economist said the forecast may be cut again. “Economists are starting to follow suit with [lower] GDP forecasts,” said the news agency.
In its monthly Grain Market Report, the London-based IGC said the global stockpile of corn could shrink by 40 million tonnes, or 6 percent, through a combination of lower production and a sharp rise in consumption. Similarly, the figure for total grain stocks, which includes wheat and feed grains such as corn and barley, is “predicted to retreat for the first time since 2012/13,” said the IGC.