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RED ALERT: SEVERE Water Deficit in Brazil/ Argentina: 10M Ton Corn Crop Loss This Year (Bloomberg)

Jan.17, 2009 in Drought, Water Crisis, Water Industry, Water Management

(Jan. 16, 2009, Bloomberg)

Corn crops in the Argentine province of Entre Rios are still suffering a “severe water deficit” even after some areas of the country received rain, the government said.

The drought remains “very serious” in parts of Entre Rios, while areas of the Santa Fe, La Pampa and Cordoba provinces are also facing a dry spell, the Agriculture Secretariat said today in a report on its Web site. Corn crops have been the worst hit, the secretariat said.

“This crop is the most harmed by the severe water deficit,” the secretariat said in the report. “Yields will be very poor even if it rains in coming days.”

Most of Argentina’s Pampas region and Brazil’s South have been hit by dry weather in recent weeks, threatening crops in the world’s biggest corn-exporting countries after the U.S.

Corn futures for March delivery rose 9.75 cents, or 2.7 percent, to $3.75 a bushel at 10:55 a.m. on the Chicago Board of Trade amid speculation that demand for U.S. supplies will rise as dryness pares output in Argentina and Brazil.

Brazil and Argentina may lose as much as a combined 10 million tons of corn because of the drought, Eduardo Tang of Terra Futuros said in interview yesterday.

Argentina’s corn growers will harvest 16 million metric tons, compared with an earlier forecast of 18 million, said Tang, head of grains trading at the Sao Paulo-based brokerage. In Brazil, growers may harvest as little as 47 million tons of corn because of the dryness, compared with 55 million tons expected before the drought, Tang said.

Soybeans

Argentina’s corn planting was 94 percent complete as of yesterday, up from 91 percent a week earlier, the secretariat also said in today’s report.

Planting for soybean crops, which are also suffering from the drought, was 89 percent finished, up from 86 percent, the secretariat said.

Damage to Argentina’s soybean crop caused by drought may be “much worse” than the U.S. Department of Agriculture predicted earlier this week, Eduardo Sierra, a climatologist at the Buenos Aires Cereals Exchange, said yesterday in an interview.

More than half of the area planted with soybeans in the country won’t get downpours until Jan. 27, which may be too late for farmers, he said.

The USDA this week lowered its forecast for this year’s soybean crop in Argentina to 49.5 million tons from a Jan. 12 estimate of 50.5 million tons.

To contact the reporter on this story: Carlos Caminada in Sao Paulo at at ccaminada1@bloomberg.net