The Rosario Board of Trade (BCR) has further slashed its soybean and maize production forecasts for the 2022/23 harvest by 4 million and 3 million tonnes, respectively, compared with March predictions.

The cut is due to the drought which has “left one of the worst national yields of the last 15 agricultural cycles”.

March’s soy harvest estimate of 27 million tonnes has been reduced to 23 million tonnes in April, 53% less than expected at the start of the campaign. For maize, the revised harvest forecast is 32 million tonnes, down from 35 million tonnes in March, a loss of around 40% compared with forecasts at the start of the season.

The revised forecast is bad news for Argentina’s international reserve outlook: as the nation’s coffers face an acute currency shortage, soy products, maize, and other agricultural commodities are a key source of dollars.

So severe is the impact of the drought that the International Monetary Fund recently agreed to relax Argentina’s reserve accumulation goals for 2023.

Economy minister Sergio Massa last week announced a new preferential exchange rate of 300 pesos to the dollar for exporters of soybeans and other agricultural products in a bid to encourage producers to liquidate their stocks and bring in currency. It is the third such preferential exchange rate in the past year.

“The ninth heatwave, which started in the last days of February and finished on Sunday, March 19, was in itself a catastrophic weather event for 2022/23 soybeans and maize,” the BCR wrote in its most recent monthly report. “Before, the season was taking place in the worst weather scenario of at least the past 60 years… [this heatwave] intensified the hydro-thermic stress effects, bringing it to extremes that are unprecedented for the sector.”

For soybeans, the estimated area lost has risen from 2.68 million hectares at the start of March to 3.58 million, with yields that “have collapsed, due to further limitations to the number of grains per square meter and drastic impacts on the weight of grains,” the board wrote.

Consequently, in April a national soybean yield of 18.6 quintals per hectare is estimated compared with the 20.3q/ha expected in March, according to the report. This is the lowest yield in the last 15 production cycles, even below the 19 q/ha registered in the 2008/09 harvest.

For maize, the estimated yield for April is down to 53.6 quintals per hectare from 57.8 in March. The BCR warned that the core region of central Buenos Aires and a large part of Cordoba “has confirmed a severe drop in expected yield for late maize”, although prospects are better in southern Buenos Aires, some sectors of south-western Cordoba bordering with San Luis and Santiago del Estero provinces, which to some degree compensate for the decreased yields elsewhere.

Compared with March, Cordoba’s maize harvest will be down by 1.75 million tonnes, Buenos Aires province by 1 million, and Santa Fe by 380,000, according to the report.

For soybeans, yields are worst affected in Cordoba, down 4.1 quintals per hectare from a month ago. The production cut is almost 2 million tonnes. In Santa Fe, the updated provincial yield is estimated at 14.6 quintals per hectare, down by 2.1 q/ha from last month, resulting in a production cut of 890,000 tonnes.

“It’s a very long way from last year’s 27.5 q/ha,” the BCR said.

-Télam/Herald