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Argentina’s Corn Production to Drop Sharply as Drought Worsens

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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.  

The Gro Drought Index shows rising drought levels in Argentina’s top three corn-producing provinces. The index, which updates daily, measures drought severity on a scale from “0” (no drought) to “5” (exceptional drought).

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.

-Related Insights and Gro Displays

South America’s Soy and Corn Crops at Risk of Production Declines, Gro Models Show

USDA Confirms Gro’s Forecasts for US Corn and Soybean Supply and Demand

La Niña Is Back—What That Means for North and South American Crops

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South America Soybean Production Monitor


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