US soyabean futures, which are at their highest level since late-July at over $10 a bushel, continue to advance on expectations that a prolonged drought in Argentina will limit yields.
Argentina is the world’s third-largest exporter of soyabeans and adverse weather conditions could mean that country harvests fewer than 50m tonnes in the 2017-18 crop year, the lead analyst at the Rosario grains exchange has forecast.
Climate experts have warned that the recent drought in the heart of Argentina’s Pampas grains belt is likely to persist through the second half of February. Commonwealth Bank of Australia analyst Tobin Gorey comments in a note that “Argentina’s soybean crops need soaking rain within that horizon to arrest a big drop” in yields.
Weather forecasters are not expecting anything like soaking rain, nor a decline in high temperatures. We are expecting prices to gain further.”
The prolonged drought is also supporting prices of corn, with Argentina the world’s third-largest exporter of the crop. The Buenos Aires Grains Exchange last week cut its corn harvest estimate for the 2017-18 season to 39m tonnes from 41m tonnes.