Grain market trends have seemingly all but put a bow on the spring 2014 harvest in Brazil and Argentina matching the U.S.'s bounty of this past year. Soybean production especially has the aura of being a foregone conclusion at 90 million metric tons in Brazil and around 56 million metric tons in Argentina. But, crops have not been harvested yet. There's still a long way to go in the season, and considering that late December is the southern hemisphere version of late June, a midseason weather check yields some areas of potential problems before these bin-busting crops are brought in.
Let's start with Argentina. The last few days of December could be very hot, with high temperatures well over 100 Fahrenheit (37.8 Celsius) in most of the central crop belt. Much of this region had favorable soil moisture supplies going into December, but triple-digit F temperatures will take up that supply in a big hurry, no matter how deep the soils are or how much residual moisture they have.
Brazil we'll look at in two segments--first in the south. In this part of the country, the farthest-south state, Rio Grande do Sul, will in all likelihood have some of the Argentina heat spreading into its territory as well before the month's end. Both RGDS and its not-too-far-away fellow soybean-growing province, Parana, are seeing both declining soil moisture and crops starting to look a little peaked due to a not-very-generous round of precipitation. There's another big difference between southern Brazil and central Argentinna, too--and that is, the southern Brazil soils are more sandy (lighter) than in Argentina. Those southern Brazil soils will dry out a lot quicker than the Argentina soils.
Finally, to the northern half to two-thirds of the Brazil crop belt. The weather pattern has been sailing right along for Mato Grosso and the other northern provinces, mostly due to near-daily rainfall over the past three weeks. However, that rain may be a mixed blessing if it continues much past early January in northern Mato Grosso, for this reason--there are quite a few acres that are on track to be harvested as early as possibly the 2nd weekend in January. And, if it keeps raining, that doesn't bode well for harvest. It sets up the potential for crop quality and volume loss. And, (again)--those early soybeans are part of the Brazil projection for a crop of 90-million metric tons--so losses could detract from that total.
We may turn the calendar into early 2014 with showers in Argentina north to Parana, Brazil and an easing of the rain pattern in Mato Grosso, and all will be well. But, we know how nervous it gets in the U.S. around the first of July with 100-degree temps and limited rainfall, so there's some reason to not add up that gargantuan South America crop total just yet.