- Bullish Black Sea corn: Argentine heat wave threatens corn yields, tightening global exportable supply and supporting Black Sea FOB prices.
- Weather risk premium: Limited rainfall before February increases crop stress during critical growth stages, encouraging risk hedging and higher basis levels.
- Cross-commodity support: Deteriorating sorghum and pasture conditions may shift demand toward imported feed grains.
- Export competition shift: Potential downward revisions from the Buenos Aires Grain Exchange could redirect demand toward Ukrainian and Russian origins.
Argentina Weather and Crop Conditions
Argentina is experiencing a severe heat wave, with temperatures approaching 40°C across major agricultural regions. Heat stress is impacting both corn and soybean crops, particularly early-planted corn, where meteorologists expect yield reductions and forthcoming production downgrades.
The core agricultural belt, including southern Santa Fe and northern Buenos Aires provinces, urgently requires 70–80 millimeters of rainfall to stabilize conditions. Forecasts indicate that meaningful improvement is unlikely before February, leaving crops exposed during critical development phases.
Planting Progress and Production Outlook
Despite adverse weather, planting is largely complete. The Buenos Aires Grain Exchange reports corn planting at 93.1% and soybeans at 96.2%. However, the combination of extreme heat and moisture deficits raises downside risk to current production estimates.
The USDA currently forecasts Argentina’s corn harvest at 53 million tons and soybean production at 48.5 million tons. Market participants now anticipate potential downward revisions as crop stress intensifies.
Impact on Other Crops and Livestock
The drought is not limited to corn and soybeans. Sorghum yields have plunged to 2.5 tons per hectare compared with earlier expectations near 7 tons per hectare, signaling severe production losses in alternative feed grains.
Livestock operations are also under pressure as pastures and forage crops deteriorate, tightening feed availability and potentially raising demand for imported feed grains if conditions persist.
Recent Rainfall and Short-Term Relief
Some relief arrived over the weekend, with La Pampa province and northwest Buenos Aires receiving 60–70 millimeters of rain. While this has provided temporary respite, farmers describe broader conditions as crisis-level, and moisture deficits remain substantial across key producing areas.
Market Analysis: Bullish Setup for Black Sea Corn
Argentina is the world’s third-largest corn exporter, so any meaningful downgrade to its crop will tighten global supply and may increase competition for export markets. Black Sea corn, particularly Ukrainian and Russian origins, stands to benefit as buyers look to alternative suppliers, supporting FOB prices and potentially lifting regional basis levels.
Traders should closely monitor February weather developments in Argentina, along with official revisions from the Buenos Aires Grain Exchange and USDA. The degree of yield loss versus current projections will be a key driver of global corn price direction and spreads between South American and Black Sea origins.
| Indicator | Current Value | Reference / Expected |
|---|---|---|
| Temperature in key regions | Near 40°C | Above normal, causing heat stress |
| Required rainfall (main belt) | 70–80 mm | Meaningful improvement only expected from February |
| Corn planting progress | 93.1% | Near completion |
| Soybean planting progress | 96.2% | Near completion |
| USDA corn production forecast | 53 million tons | Subject to downside revision |
| USDA soybean production forecast | 48.5 million tons | Subject to downside revision |
| Sorghum yield (actual) | 2.5 t/ha | 7 t/ha expected |
| Recent rainfall (La Pampa & NW Buenos Aires) | 60–70 mm | Temporary localized relief |
Source: Market Data
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