The South American grains powerhouses has been blighted by dry weather. A deepening drought in Argentina and limited corn supplies in Brazil, two of the three largest exporters, have opened a window of opportunity for top supplier the United States.
Argentina’s Rosario Grains Exchange slashed 14 percent off its forecast for the country’s soy crop, saying a drought now in its fourth month would limit the harvest to 40 million tonnes versus its previous estimate of 46.5 million. The South American grains powerhouse has been blighted by dry weather since November. An unrelenting Southern Hemisphere summer sun has shriveled crops, dented Latin America’s No. 3 economy and put upward pressure on world food prices. The exchange cut its corn crop estimate to 32 million tonnes from 35 million. Argentina is the world’s third-biggest exporter of corn and soybeans, as well at its top supplier of soymeal feed, used to fatten cows and pigs from Europe to Asia. Weather forecasters say they do not expect enough rain over the days ahead to reverse the damage in most areas.
U.S. CORN EXPORTS HAVE GROWN
A deepening drought in Argentina and limited corn supplies in Brazil, two of the three largest exporters, have opened a window of opportunity for top supplier the United States, which has the largest available surplus for export. Importers are buying U.S. corn at the fastest pace since the mid-1990s, according to U.S. government data, as tightening stocks in Latin America prompt a rush to purchase cargoes of the grain from animal feeders worldwide. Over nine brisk weeks, corn sales have averaged an unprecedented 1.8 million tonnes a week, the strongest weekly sales for a single marketing year in 23 years, according to U.S. Department of Agriculture. Brazil, Argentina and Ukraine have seized market share from the United states in recent years, but as Argentina’s drought has worsened, U.S. exports have grown.