The Debts of the Spenders: Argentina Soy Conditions Deteriorate

Potential supply destruction spells good news for bulls. Traders have a right to be skeptical of Argentine farm data - the govt has been accused of manipulating and delaying data releases. Unlike the US where traders take such actions for granted, both Argentine farmers and speculators openly revolted earlier this year w/strikes and media condemnation of the statistics.

But official reports are still examined closely. And the government has promised to clean up its reporting. Recent reports seem to corroborate independent analysis that the situation on the ground is much worse than expected.

Argentina Soy Conditions Vary; Some Early Frost Damage-Ag Secy

With over half of the soy harvest complete, conditions vary widely with drought
damage in much of the early soy and late soy in some areas suffering from early
frosts, the Agriculture Secretariat said in its weekly crop report Wednesday.

As of April 23, 66% of the 2008-09 soy crop had been harvested, up 11 percentage
points from the same date last year.

In the Lincoln district of Buenos Aires province, most of the early soy has been
harvested, but the late crop has been affected by the first frost, with increased leaf
losses, the Secretariat said.

Earlier Wednesday, the Buenos Aires Cereals Exchange slashed its forecast for
2008-09 soy production by almost three million metric tons, pegging output at just
34 million tons.

The Secretariat has forecast production at 37 million to 39 million tons, but
revoked that forecast last month due to what it called “errors.”

As of April 23, 65% of the 2008-09 corn crop had been harvested, up 16 percentage
points from this point last season.

However, the crop is in poor shape due to drought damage. The Secretariat forecasts
final production at 12.5 million to 13.8 million tons, the smallest crop in over
five years.

In the Bragado district of Buenos Aires province, the harvest is progressing
rapidly, without problems securing storage or harvesters “mainly due the yields
coming in well under the average of recent seasons,” the Secretariat said.

In the important corn-growing province of Cordoba, about 90% of the crop has
been harvested, with yields continuing to be poor due to the drought damage. Final
yields in the province are expected to average 6.5 to 7 tons per hectare, the
Secretariat said.

Source: CME Commodity News for Tomorrow 4/30/09