Recent Rains and Upbeat Forecast Revive Prospects for Argentina Corn, Soybeans

Recent rains have eased drought conditions in Argentina’s soybean- and corn-growing regions. And with longer-term forecasts calling for more rainfall in the coming months, the country’s production looks likely to rebound from last year’s weak harvest. 

Argentina is normally the world’s largest exporter of soybean meal and oil, so increased soybean production will bolster global supply chains for the commodities. A 43% plunge in last year’s Argentine soybean crop — and a resulting 22% year-over-year decline in its soymeal exports — has pushed soybean meal futures up by 10% year over year and driven competing US soymeal exports to record levels for this time of year. 

Prospects have now improved for Argentina’s soybeans, which are currently being planted. Recent rains, which may have been helped by El Niño, have lowered Gro Drought Index readings and boosted soil moisture levels since mid-October, as shown by Gro’s Climate Risk Navigator for Agriculture, which can be weighted for a specific crop and region. Soybean production is currently estimated to nearly double from last year. 

Conditions also have improved for Argentina’s new corn crop, though “moderate” drought levels, as measured by the Gro Drought Index, persist in the biggest corn growing provinces, as seen in this Gro Navigator display. Argentina is the third-largest corn exporter, after Brazil and the US. 

Gro’s machine-learning crop yield forecast models, included in our South America Corn and Soybean Production Monitors, will begin generating daily updated forecasts in mid-December when the crops become established. 

However, for Argentina’s wheat crop, which is currently being harvested, the easing drought conditions came too late. Severe drought for much of the season — the second worst in 20 years — weighed heavily on wheat yields, as seen in this Navigator display. The USDA recently sharply cut its estimate for Argentina’s wheat harvest, though production is still expected to top last year’s output, as Gro wrote about here. 

In 2022, La Niña fueled drought conditions for Argentine crops. Now, El Niño is strengthening, which typically brings higher precipitation to northeastern Argentina and southern Brazil. The US Climate Prediction Center forecasts an 88% chance that El Niño conditions will continue through at least May 2024, which bodes well for Argentina’s corn and soy crops. 

Previous El Niño years, including 2019 and 2015, saw higher Argentine corn and soybean yields compared with La Niña years, as seen in this Gro display. 

Gro’s medium- to long-term weather forecasts indicate favorable growing conditions for Argentina’s soy and corn crops could persist, with increased precipitation and milder temperatures expected from December through April, as this Gro display highlights. However, forecasts made months in advance contain a high degree of uncertainty. 

Meanwhile, in Brazil, with a soybean crop roughly triple the size of Argentina’s, planting has been delayed due to increasing dryness in the country’s main soy-producing states, as Gro wrote about here, although forecasted rains for this week could aid the crop. A late soybean crop also could set back Brazil’s second corn crop, or safrinha, which goes in the ground after soybean harvest in February. Gro’s South America Corn and Soybean Production Monitors allow users to monitor Brazil’s crop progress.