Adverse weather conditions in South America causing crop damage
World corn supplies may fall 5 to 7 million tons short of U.S. Department of Agriculture forecasts due to dry weather in South America that is damaging crops, creating shortages and driving up the price of corn on futures exchanges, according to Toay Commodity Futures Group.
Growing areas in Argentina, southern Brazil and Paraguay have received less than 50% of average rainfall since December 1, with the harvest beginning in two months. Argentina growers have had to halt 2011/2012 corn planting due to dry soil, according to the Buenos Aires Grains Exchange, causing worries regarding low supplies and higher world grain prices in 2012. Argentine growers have seeded 79.7% of the 3.74 million hectares estimated for planting with commercial-use corn, but that corn is at a critical stage of development under adverse conditions.
The USDA predicted Argentina’s corn harvest at 29 million metric tons, but agricultural economist Manuel Alvarado Ledesma said the crop may not come in at more than 23 million metric tons.