Crop conditions in Argentina appear to be going from bad to worse, with much of the country's farming zones facing the worst drought in about 30 years.
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Wheat farmers in some regions are reportedly abandoning hope of any production this season, and the summer crop plant is stalled while farmers wait for sufficient rain.
September usually heralds wetter weather to finish the winter crop and plant the summer crop. However, the forecast for a third straight La Nina weather pattern is expected to limit precipitation for the balance of the year.
Typically, La Nina leads to hot and dry conditions for Argentina. The likelihood that the cooling of the equatorial Pacific will linger through October has risen to 97 per cent, according to the latest forecast from the United States Climate Prediction Centre. And the chances of La Nina hanging around through to the end of January are now 80pc.
This would spell disaster for grain production in Argentina this season, with concerns growing amongst industry participants, analysts and meteorologists that Argentina will see a repeat of the 2008-09 season, commonly referred to as the "great drought".
The Buenos Aires Grain Exchange (BAGE) released its latest crop update on September 15, and the picture it painted was not rosy.
More than one-third of the wheat area, or 34pc, was in the poor to very poor crop condition category. This was up from 26pc just a week earlier. Only 15pc of the wheat area made the good to excellent category.
The wheat crops are so bad in some regions, particularly in the country's north, that crops are dying. In other areas, farmers are likely to spray them out and plant to summer crop if sufficient spring rain arrives.
Argentina is coming off record wheat production of 22.4 million tonnes in the 2021-22 season. The harvested area was 6.7 million hectares, giving an average yield of 3.34 tonnes per hectare. According to BAGE, the planted area is already back by 9pc to 6.1 million hectares.
The severity of this season's drought and the long-term forecast suggests a 20pc reduction in yield compared to last year is probably conservative. Nonetheless, that would be a yield of 2.67t/ha and would result in wheat production in the range of 15.8 million tonnes.
With domestic consumption running at around 6.4 million tonnes and assuming no change to ending stocks, exports could be as low as 9.4 million tonnes.
The prospect of another La Nina weather pattern does not bode well for Argentina's 2022-23 season grain production, especially coming off one of the worst winter droughts in three decades.
Every La Nina is different, however, entering the spring with an extremely poor soil moisture profile and the days beginning to heat up is not a good start.
While there is still plenty of time for the required rains to arrive for the summer crop planting season, it will make it extremely difficult for winter crop production to recover.
