ARGENTINA, Australia's main rival as the largest wheat producer in the southern hemisphere, is enduring a torrid season with its worst drought since at least 2015 and possible for several decades if the dry conditions persist as forecast.
Spanish language La Jornada newspaper reported the drought could end being the worst in the South American nation for 60 years.
It said at least 28.5 million tonnes of production across corn, soybeans and wheat had been wiped out.
Episode 3 commodity analyst Andrew Whitelaw said the drought event was comparable to the 2018-19 and 19-20 droughts in eastern Australia.
"It will definitely lead to significantly lower production throughout the country," Mr Whitelaw said.
However, he said it was unlikely to have a material impact on Australian grain prices.
"This has all been well and truly factored in by the market already, so farmers with unpriced grain in the silo should not be expecting a sudden jump in values because of the Argentina drought."
The drought has been partly caused by the same weather pattern that led to the deluge of rain across Australia in the spring, a strong La Nina event in the Pacific Ocean.
La Nina is correlated with drier than average conditions in the Americas, the opposite to Australia, with the humid, moist air blowing across to Australian shores.
La Jornada said the drought was impacting 55pc of Argentina.
Most severely impacted are provinces in the north of the country such as Santa Fe, Entre Ros, Crdoba and the Chaco.
These northern provinces are some of the major grain producing regions in the country, while southern Patagonia is more livestock orientated.
The hot and dry conditions are proving especially taxing for summer crops, such as corn and soybeans, with reports of crops going unplanted due to a lack of moisture.
In the short term, official Argentine weather forecasters say there could be some rain this week, but only around 10-20mm in most key areas.
The Buenos Aires Bolsa de Cereales (Grain Exchange) forecast a wheat crop of 12.4 million tonnes, down a massive 10m tonnes year on year on record 2021-22 production.
Gregor Heard
Gregor Heard is ACM's national grains industry reporter, based in Horsham, Victoria. He has a wealth of knowledge surrounding the cropping sector through his 15 years in the role. Prior to that he was with the Fairfax network as a reporter with Stock & Land. Some of the major issues he has reported on during his time with the company include the deregulation of the export wheat market, the introduction of genetically modified crops and the fight to protect growers better from grain trader insolvencies. Still involved with the family farm he is passionate about rural Australia and its people and hopes to use his role to act as an advocate for those involved in the grain sector.
Gregor Heard is ACM's national grains industry reporter, based in Horsham, Victoria. He has a wealth of knowledge surrounding the cropping sector through his 15 years in the role. Prior to that he was with the Fairfax network as a reporter with Stock & Land. Some of the major issues he has reported on during his time with the company include the deregulation of the export wheat market, the introduction of genetically modified crops and the fight to protect growers better from grain trader insolvencies. Still involved with the family farm he is passionate about rural Australia and its people and hopes to use his role to act as an advocate for those involved in the grain sector.
