Argentina is still on track to grow a record soybean crop this season after moderate to heavy showers in recent days ended a brutal heat wave that threatened to slash yields.
Corn suffered some damage in December's heat wave, but Argentine farmers are still expected to produce the second-largest crop on record in the 2013-14 season.
Argentina is the world's top soymeal and soyoil exporter, and the No.3 soybean and corn exporter behind the U.S. and Brazil.
There are still some dry spots in the central and southern areas of Buenos Aires province, but recent showers have boosted crop prospects across much of the farm belt, said Buenos Aires Cereals Exchange chief analyst Esteban Copati.
The recent dry spell will hurt yields, particularly corn, but the damage is relatively isolated and most of the crops weren't seriously harmed, Mr. Copati said.
The rest of the growing season will be marked by hot, dry stretches and periodic storms that will bring relief to thirsty crops, according to the exchange. January is expected to be a relatively wet month, helping soybeans and corn during a key development phase.
However, early frosts towards the end of March will likely test crops in some areas, especially those with a high percentage of late-season plantings, the exchange said.
The soybean harvest kicks off in March and finishes in July, while the corn harvest runs from February to July.
To date, soybean planting is 90.9% complete, with total area expected to reach 20.5 million hectares (50.6 million acres), up from 19.7 million hectares last season, according to the exchange. The U.S. Department of Agriculture is expecting record soybean output of 54.5 million metric tons from Argentina this season. The previous record of 52.7 million tons was set in 2009-2010, according to Argentina's agriculture ministry.Read more: Potential surprises in Friday's data? Chat the reports & more in Marketing Talk
Preview Friday's USDA reports with CME Group analysts
Meanwhile, dry weather slowed corn planting in December. To date, 82.8% of the corn crop has been planted, according to the exchange, which sees the area under cultivation falling to 3.3 million hectares from 3.7 million hectares the previous season.
The USDA forecasts Argentina's corn production at 26 million metric tons this season.
