FORT COLLINS, Colo. (Reuters) - Many South American farmers wince at the thought of La Nina’s presence during their corn and soybean growing seasons, especially if things are already dry like they are now, though luckily La Nina does not always dictate final outcomes.
Earlier this month, the U.S. government placed chances of La Nina from November through January 2022 at 70%. Those odds are greater than the year-ago forecast, which preceded the strongest La Nina episode in a decade.
Over the past month, the surface waters in the equatorial Pacific have cooled down substantially relative to normal, characteristic of La Nina conditions. La Nina is often associated with dry weather in Argentina and southern Brazil, but that is not always guaranteed.
The upcoming La Nina is predicted to be a bit weaker than last year’s event, but since strength does not perfectly correlate with the weather, any degree of La Nina or its warm counterpart El Nino must be watched closely.
Planting has not yet begun in South America so there is time for some moisture replenishment, and forecasts suggest rains could soon be on the way.
DRY TO DRY AGAIN
Argentina’s corn and soybean yields earlier this year fell below average because the growing season was drier than normal. It was nowhere near as bad as the 2018 harvest, which was associated with a slightly weaker La Nina than the recent one.
Brazil managed a bumper soybean harvest in early 2021, but its heavily exported second corn crop was extremely disappointing. Drought and then frosts plagued the south, including No. 2 corn and bean grower Parana, where second corn yields were half normal levels.
Second corn yields were also trimmed by prolonged dryness in top grower Mato Grosso, though to a much lesser extent than in the south. Brazil’s total 2020-21 corn crop is estimated about 15% off the previous year’s record.
Mato Grosso should be coming out of its dry season in the next several weeks, though that period was extra parched this year. Farmers there typically start planting soybeans on or after Sept. 15, and forecasts suggest some decent rains could be starting up in a week.
Soybean planting is most prominent in Parana during October, though full-season corn will get started earlier. Replenishment is desperately needed there after several months of short precipitation, though weather models also show chances of rain over the next week or so.
Soil moisture is not a good indicator in central and northern areas of Brazil like Mato Grosso, because soils there do not hold moisture as they do in other prominent world growing regions. Rainfall amounts, if normal, are typically ample enough to produce a strong crop even if the season starts out dry.
Argentina does not start planting soybeans in earnest until November, but corn planting typically stretches from September through January. The last three months have featured about half of the normal rainfall, though forecasts indicate good rains could be coming next week.
LA NINA OUTCOMES
Argentina’s corn and soybean yields have a distinct relationship with La Nina and El Nino. All the country’s worst harvests in recent decades have coincided with La Nina, and it has been very uncommon for El Nino to be associated with yield shortfalls.
Most of Argentina’s very worst results occurred during moderately strong La Ninas, though OK yields were managed in just a couple of years where the condition was present. Corn and bean yields were strong in 2017 despite the weak la Nina.
Soybean yield outcomes in Brazil do not relate very well to La Nina or El Nino, but more consistent results have been observed in Mato Grosso during La Nina versus El Nino.
The timing of Brazil’s second corn growing season makes that crop more susceptible to sketchy weather since the onset of Mato Grosso’s dry season can creep in. Mato Grosso’s second corn yields tend to be slightly better during La Ninas than El Ninos, though neutral to slight La Nina conditions seem most favorable.
Stronger La Ninas tend to present problems for Parana’s second corn, but yields have been fine, even good, during milder events. A borderline La Nina might be the best-case scenario for the upcoming crop.
The opinions expressed here are those of the author, a market analyst for Reuters.
Editing by Matthew Lewis
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