Argentina's drought will worsen this week, local meteorologists said Monday, dashing hopes that rain in the days ahead might be strong enough to revive parched corn and soy fields.
Weeks of unforgiving Southern Hemisphere summer sun have toasted grains fields in the world's No. 2 corn-exporting country, killing expectations that Argentina might replenish global corn supplies depleted by a lackluster U.S. harvest.
"We expect some rain in the days ahead, but it will not be enough to improve soil moisture conditions," said Liliana Nunez, a forecaster at the National Meteorological Service.
The drought prompted the Rosario grains exchange to slash its 2011/2012 corn production outlook by nearly 18 percent to 21.4 million tons. Soy crops, which are planted a bit later than corn, could also be at risk if the sun does not soon give way to rain clouds, the exchange said.
As of Monday, there were few signs of that happening in powerhouse grains-producing province Buenos Aires.
"It's a very pretty day, unfortunately," said Ruben Sgalippa, who runs a 100-hectare farm in the provincial village of Moctezuma. "They say we could start to get rain on Tuesday, but so far there's not a cloud in the sky and we're not getting any breeze. It's very hot."
The drought is expected to add to the government's fiscal challenges this year as Argentina faces fallout from Europe's debt crisis and slower demand from No. 1 trade partner Brazil as well as China. So not only farmers and grains traders but sovereign bondholders as well have been left watching the vast blue Pampas horizon for signs of rain.
They will be probably disappointed in the days ahead. "Elevated temperatures combined with little rain will mean that the week ends with a moisture deficit," said Leonardo De Benedictis, a forecaster with the Clima Campo consultancy.
"Temperatures will remain high in the center of the grains belt this week," he added. "From early Tuesday through Thursday there is a probability of rain, but the showers will be isolated and with little accumulation of between 10 and 15 millimeters." Farmers say more than 100 millimeters is needed to save their corn fields and revive soy. Argentina provides about 12 percent of the world's soybean exports. It is the top exporter of soyoil, used for cooking and in the making of biofuels.
The heat is related to the La Nina phenomenon, an abnormal cooling of waters in the equatorial Pacific Ocean. The effect threatens to upset commodity markets from corn to coffee as dryness in Argentina and Brazil whither crops and the southern United States, a top cotton-growing area, suffers its worst drought in a century.