By Nicholas Nehamas and Kyra Gurney
January 24, 2017

A luxury condo tied to a top aide of Argentina’s former president sold for $10.7 million earlier this month. The deal is part of a fire sale of related U.S. properties under investigation in Argentina.

The real estate empire — ranging from a strip mall bank branch in Kendall to a high-rise condo in Manhattan — was valued at nearly $65 million.

A federal prosecutor in Argentina began looking into the mysterious properties after they were linked to a maze-like offshore corporate structure controlled by Héctor Daniel Muñoz, the right-hand man of former president Néstor Kirchner.

The true owners of the properties have not been identified. But they could be feeling the heat: The condo at the Regalia tower in Sunny Isles Beach is the fifth property sold since the prosecutor opened an investigation last year.

Also sold: A CVS pharmacy building in Little Havana that traded for $13.1 million in July; bank branches in Pompano Beach and Kendall that sold for $5.8 million in August and $6.5 million in November, respectively; and a small unit at luxury tower Icon Brickell that sold for $320,000 in November.

Muñoz’s role was revealed in April thanks to the trove of offshore corporate files known as the Panama Papers. The investigation followed.
But the inquiry now appears to be fizzling after the prosecutor, Juan Manuel Pettigiani, handed it to another government agency for further analysis in June, as required by Argentine law. Little progress has been made since then, Pettigiani said Monday.

“It’s very sad that in my country activity that could be tied to public corruption is not of public interest,” he wrote in an email to the Miami Herald. “It is sad to see the truth escaping.”

Both Muñoz and Kirchner are dead. Kirchner’s wife, Cristina Fernández de Kirchner, who succeeded him as president, was recently indicted for corruption in Argentina. The name of current president Mauricio Macri also surfaced in the Panama Papers; he has denied any wrongdoing.

In the past, drug dealers and corrupt foreign officials have been busted buying expensive homes in the United States, leading to new federal regulations on money laundering in real estate.

Making a profit

The four-bedroom unit at the Regalia sold for the same price paid in 2014, when a company controlled by Muñoz associate Sergio Todisco bought the brand-new condo.

Breaking even on a luxe Miami condo might seem like a bad deal. But if Argentine pesos were changed into dollars and used to buy the condo in 2014, the math changes. The dollar has boomed in value against the peso since then. If the proceeds from the 2016 sale were converted back to pesos, the investment would have roughly doubled in value. Foreign investors routinely take advantage of such currency fluctuations to turn a profit.

The buyer of the Regalia unit is listed in Miami-Dade County property records as a company managed by Sean Sullivan of Boca Raton.
Three of the other properties also sold for an apparent loss — in dollars, at least. The Regalia sale, first reported by the Real Deal, comes six months after a Little Havana pharmacy building also owned by the Argentine network sold for $13.1 million.

A lawsuit filed in Miami-Dade County accused the seller — Elizabeth Ortiz Municoy, Todisco’s ex-wife — of trying to hush up the pharmacy deal. Municoy didn’t want “the CVS property listed for sale … [and] … and wanted to keep the sale of the CVS property confidential,” according to a civil complaint filed by another broker. In a legal response, Municoy’s attorney denied the charges and counter-sued for breach of contract. Her Surfside-based realty firm also marketed the unit at the Regalia for sale, according to a Realtor’s database, asking $12.5 million in 2015 and $10.95 million last year.

Municoy’s involvement in that deal contradicts statements she previously made to the Herald. She consistently has denied playing a role in the real estate deals drawing scrutiny in Argentina. A voice message left at her office Tuesday morning was not returned.

The properties still owned by the Argentine network include a bank branch in Miami Shores and luxury condo units in Brickell, Hollywood and Sunny Isles Beach. Their total value? Nearly $10.3 million.

By Caroline Stauffer
Jan 24, 2017

Argentina this week will sell up to 12.5 billion pesos ($782 million) worth of reopened inflation-adjusted peso bonds maturing in 2021, the Finance Ministry said on Tuesday. The sale will take place between Wednesday and Thursday, a week after the country sold $7 billion of dollar bonds.

The bond will yield 2.5 percent above a reference coefficient linked to the inflation rate. Argentina’s government sees inflation at 17 percent this year, though economists see it exceeding 20 percent. “The bonds will accrue interest over adjusted balances as of the issue date at a rate of 2.5 percent per year, which will be payable per semester due on January 22 and July 22 of each year until maturity,” the statement said.

By Maximilian Heath
Jan 24, 2017

PERGAMINO, Argentina (Reuters) – Soy grower Carlos Zucarelli looks over his farm in Argentina’s bread-basket province of Buenos Aires, watching ducks float around on a shallow lake covering much of what was meant to be this year’s crop area. His and other farms in the area of Pergamino in northern Buenos Aires are still suffering from the effects of heavy December and January rains that flooded about 20 percent of their fields. Of Zucarelli’s 70 hectares, 40 percent is underwater.

“It’s irrecoverable because there’s no time left to replant soy. It’s still going to take time for this part of the farm to dry out,” he said, the ducks quacking in the background. Elsewhere in Buenos Aires province and the southern part of the neighboring province of Santa Fe, flood-related losses are estimated by the Rosario grains exchange at 660,000 hectares.

The exchange sees Argentina’s soy harvest at 52.9 million tonnes, under the 55.3 million tonnes produces in 2015-16. The flooding in the world’s No. 3 soybean exporter caused soybean and soymeal prices on the Chicago Board of Trade to hit six-month highs last week.

In Pergamino as a whole, farmers say about 20 percent of seeded crop land has been overcome by excessive moisture. Another farmer down the road is Ariel Pizi, who says about 12 percent of his planting area has been lost. Close to the flooded parts of his farm, soy leaves are turning yellow rather than the usual green, meaning they are also suffering from too much rain. “The losses are just enough to wipe out our profit margin,” he said. The water on his and other farms has turned what should be green fields into a range of yellowish colors punctuated by black splotches of land that will not be replanted this year.

Some 500 millimeters of water have fallen in this area since late December, said Luis Crosetti, advisor to the Pergamino chapter of the AFA (Federation of Argentina Farmers). “If the rains continue the production losses will be … bigger,” Crosetti said.

The agriculture minister has not yet issued a soy harvest estimate but he told local media that he expected the December and January rains to have “a strong effect on production.”

By Luke Patey
January 24, 2017

Argentina’s president promised to separate his country’s economy from Beijing. That was before Beijing had its say.

BuENOS AIRES, Argentina — One of the most noticeable features of China’s engagement in Argentina over the past two decades has been the rapid growth of small Chinese-run supermarkets across the large South American country. In the wake of a devastating financial crisis at the turn of the century, many Argentines have come to rely on low-cost supermarkets manned by Chinese immigrants to buy their everyday stables.

But in Palermo Hollywood, a leafy neighborhood in Buenos Aires populated by hipster cafes and boutique hotels, a new side of China’s presence in Argentina can be found. The neon lights of a redbrick building marked Restaurante Beijing, a fine-dining establishment catering largely to the city’s affluent Asian residents and, increasingly, to satisfying the appetites of a growing Chinese business community.

Moving beyond the ubiquitous Chinese-run supermarket, China’s economic partnership with Argentina has soared to new heights. In recent years, China Inc. has been busy buying up large stakes in Argentina’s energy, mining, and banking sectors. Taking its engagement a great leap forward in 2014, China agreed to provide Argentina with over $20 billion in loans to finance numerous infrastructure projects, including new railway lines and hydropower dams.

But the rush of Chinese investment and finance into Argentina has produced new tensions in the relationship. Sitting down to dinner with a Chinese diplomat at Restaurante Beijing early last year, I had hoped to hear more about the latest wave of Chinese money flowing into the country, and how Beijing was coping with the potential destabilizing impact of the recent national election.

Just months earlier, Mauricio Macri, the former mayor of Buenos Aires, had won a runoff election to become Argentina’s new president. Macri promised to take the country in a new direction: away from the populist policies and fiery anti-American rhetoric of his long-serving predecessor, Cristina Fernández de Kirchner, and toward a center-right agenda of liberalizing the economy and restoring relations with the United States and Europe.

The changing of the political guard threatened to upset Argentina’s budding relations with China. During the final 18 months of her presidency, Kirchner agreed to take on huge new debt from China. Now Macri, questioning the lack of transparency in the agreements, which were not released publicly, and the possible negative environmental footprint of the planned construction projects, vowed to review and potentially cancel China’s mega-deals.

At Restaurante Beijing, the Chinese diplomat brushed aside the incoming government’s concerns over transparency: “I say to our new Argentine friends, ‘Go take a look at the agreements, we’ll wait.’ And if they find nothing wrong, they should respect the contracts.”

He maintained an air of certainty that Macri would not overturn the deals. China’s offer of billions in loans was too large to turn down, a simple rule of thumb that helps explain China’s quietly growing power in Argentina and beyond. “Let me put it this way,” he said blankly, “nobody hates money.”

Mauricio Macri was trying to do something few world leaders had dared: Say no to China.

Macri’s agenda was an affront to the role of China in underpinning Argentina’s economic revival over the past decade. China had not only become a new and large trading partner, buying the majority of Argentina’s soybean exports, but also a critical financial backer when the country was unable to borrow from international markets due to its massive debt default in 2001.

With Argentina’s economy floundering after the 2014 commodity bust, spurning the world’s eminent global economic power hardly seemed a wise move. Beijing’s reaction to the threat from Argentina’s new president offered a microcosm of how China, a one-party state, is reacting to democratic political change endangering its interests overseas.

Saying no to China was also an antithetical position for Macri. The son of a prominent business tycoon, and a former boss of the Boca Juniors, one of Argentina’s most successful football clubs, Macri was staunchly pro-business. After he was elected president, he promoted banking and energy executives to key cabinet roles and moved forward with pro-market reforms.

But Macri’s personality is more nuanced than his stiff businessman-turned-politician background portrays. He is not a man fearful of change or taking risks. A 12-day kidnapping ordeal at the hands of rogue police officers in 1991 compelled Macri to start his political career. Changing course on relations with China was another bold move.

Under Kirchner, Argentina fostered close ties with Beijing, while maintaining an acrimonious relationship with the United States and Europe. Kirchner blamed Washington for how Manhattan-based hedge funds, which she commonly referred to as “vulture banks,” profited from buying Argentine debt at distressed prices, and flatly refused to negotiate with many of the debt holders.

But Macri wanted to make amends and rekindle ties with the West. “If everything comes from China, this will be an imbalance,” Macri told a reporter at a 2015 investment conference in California. “We are mainly descendants of Europeans,” he said, “so it’s easier to deal with Europe than Asia.”

Months after coming to power, Macri welcomed a line of Western leaders to Buenos Aires, capped off with the arrival of U.S. President Barack Obama in March 2016. The U.S. president’s high-profile visit was a testament to Macri’s skill in steering Argentina’s new foreign policy forward. “No one thought he would move so fast,” a senior Western diplomat told me. “Who else can get Obama after only a few months in office?”

Pictures of Obama meeting cordially with Macri, and later locking arms with renowned Argentine tango dancer Mora Godoy in a short strut at a state dinner, stood in contrast to the more formal proceedings between China’s President Xi Jinping and Kirchner in previous years.

“China is still a very important partner to Argentina, and I expect it to be very active in the future,” Diego Guelar, Argentina’s ambassador to China, told me. “But the relationship was based on Argentina’s isolation. There is a new environment now. China is not going to be alone.”

And Macri’s new outreach to the West was paying dividends. A few months after being elected, he was able to settle Argentina’s long-standing debt problems by offering a repayment deal to hedge fund holdouts. The conciliatory move warmed relations with the United States and ushered Argentina back into global financial markets with a $16.5 billion bond sale, a record amount for an emerging market.

Macri also quickly gathered pledges for new foreign investment worth over $30 billion. Although not entering the country as quickly as hoped, it was a vast improvement from the previous year. And American blue chips, including General Motors and Dow Chemical, were at the front of the queue. “I’m optimistic about the changes that have happened in Argentina with the new government,” said Rex Tillerson, outgoing ExxonMobil CEO and U.S. President-elect Donald Trump’s nominee for secretary of state.

It is still the early days, but by forging closer ties with the United States and Europe, and implementing market-friendly policies, Macri was introducing competition to Chinese companies, which had been reaping the rewards of favorable treatment offered by his predecessor. “Macri hasn’t cut off China, but he wants to lower Argentina’s dependency on it,” a senior Western diplomat told me in Buenos Aires. “Now the Chinese need to get in line like everyone else.”

While so many world leaders were looking to China for new trade and investment opportunities, Argentina’s new president was succeeding in drawing interest from the West’s stagnating economies. It was in the ornate reception hall of Casa Rosada, the presidential palace in Buenos Aires, that Kirchner christened billions in new loan-for-infrastructure agreements with China’s President Xi Jinping. The move locked Argentina into a generation of debt payments, but in return, among other projects, China agreed to bankroll and build a major upgrade to Argentina’s ailing railway network as well as two large hydropower dams in the far south of the country. But when Macri swept into power in late 2015, he immediately put the projects on hold and placed a microscope on their financial and environmental consequences.

In hopes of finding out whether China’s mega-deals were really in jeopardy, I spoke with Juan Uriburu Quintana at the offices of Electroingenieria, an Argentine construction company and one of China’s main domestic partners in the country. Quintana was responsible for the company’s legal and institutional affairs with China. It was easy to see why he was a well-suited interlocutor. For nearly a decade, Quintana had lived and worked in China and Taiwan and could switch almost effortlessly among Spanish, English, and Mandarin.

Quintana also had experience with the Argentine national railways company, the key domestic partner in a $2.4 billion project financed by China to rehabilitate a fleet of trains and 930 miles of railway line in the Belgrano network, a main artery in Argentina’s railway system.
“We call it ‘Train to the Clouds,’” Quintana told me. Ascending into the towering Andes, the popular passenger train was one of the highest railways in the world. In passing through Argentina’s agricultural heartland and onward to Chile’s Pacific coastline, the Belgrano network had the potential to be much more than a tourist attraction. In particular, by linking the Argentine heartland with the Pacific coast of South America, the train line offers agricultural goods a quicker route to China.

China’s loan to improve the railway network promised to substantially increase freight cargo size and double speeds, enhancing the competitiveness of Argentina’s agriculture industry. But Beijing was not offering billions of dollars in loans for altruistic reasons. “China is interested in the railway because it gives faster and cheaper access to our raw materials,” Quintana said.

With benefits ironed out for both sides in the railway project, Macri’s critique fell squarely on his predecessor’s agreement to borrow $4.7 billion from Chinese banks to build two hydropower dams on the Santa Cruz River. Some 1,550 miles south of Buenos Aires, Santa Cruz province is part of the larger Patagonia region, known for its breathtaking natural beauty and iconic glaciers. Preparatory work had already begun on the hydropower dams when Macri suspended construction in late 2015.

Although the dams would diversify Argentina’s energy sources and bring thousands of new jobs to Santa Cruz, they would leave a deep scar on its landscape. Over 116,000 acres were to be flooded, and altering the watercourse of the glacial river would ravage the region’s pristine ecosystem. When completed in 2020, the sparsely populated Santa Cruz would not even have the transmission capacity to handle the 1,740 megawatts of electricity produced. In a December 2015 meeting with prominent environmentalists, Macri reportedly said that he favored other viable and cleaner energy projects over the hydropower dams in Santa Cruz. “Let’s try to stop them,” he said.

There were also political reasons for Macri’s opposition to the dams. Santa Cruz is the political backyard of the Kirchner family. The larger of the two dams was to be named after Néstor Kirchner, Cristina’s late husband, who was also a former president. Although China’s mega-deals have steered clear of any allegations, the former President Cristina Kirchner is facing corruption charges for dealings with business partners in Santa Cruz.

But Juan Quintana believed the delay to the dams would be short-lived. Electroingeneria and its partners implored the Macri government to move forward in order to protect the jobs created by the project as well as Argentina’s strategic relationship with China. This reflected the broader rift of public opinion toward the dams: Argentina needed to find energy alternatives beyond oil and gas but still protect its environment. It was a fine line for Macri to walk. “Macri inherited the situation of being very linked with China. We cannot afford to upset one of our biggest trading partners,” Quintana told me. “Otherwise, there are going to be consequences.”

In April 2016, Macri was set for his first encounter as president with China’s leader Xi Jinping. On the sidelines of a global summit in Washington, the two men met to discuss the fate of China’s mega-deals. The meeting did not last long. After sitting with Xi for only a half hour, Macri later told the Argentine press that Beijing was “willing to revisit agreements” in order “to deepen the relationship instead of reducing it.” His tone toward China was far more conciliatory than it had been earlier.

But Macri’s hands were tied in the negotiations. Some weeks earlier, Zhang Zhijie, president of the China Development Bank, had paid a visit to Buenos Aires to give a polite warning to Argentina’s new government. As leader of the world’s largest development bank, and the main lender to Argentina’s infrastructure projects, Zhang wanted to remind Argentine officials to read the fine print of their loan agreement.

Gaining access to the official documents only after coming to power, the incoming government was told by China’s top banker that the hydropower dams agreement contained a cross-default clause: In the event it was canceled, China’s loan for the Belgrano railway project would be stopped. The Santa Cruz hydropower dams were to be the largest ever built by a Chinese company overseas, and personally endorsed by Xi. Chinese officials were not about to let their leader lose face from a potential cancellation. They set conditions in the loan to help ensure its survival in the face of any political turbulence.

China bet correctly that Macri was not about to sacrifice the important railway project, and upend Argentina’s broader relations with China, in order to stop construction of the dams. Shortly after the meeting between Macri and Xi, Argentine officials gave the go-ahead for construction to continue. The outcome in Argentina was not unlike others in the world where domestic political change has threatened major Chinese investments. From Zambia to the United Kingdom, China has been a political punching bag for opposition figures and incoming leaders to scrutinize the initiatives of their predecessors. Once settled in power, however, new leaders tend to roll back the tough talk, realizing the nearly irreplaceable importance of China as a trading partner and investor. Yet despite often wielding asymmetric economic power in its foreign relations, China can be a negotiable global power. If the business bottom line is respected, and political embarrassment avoided, Beijing is not above accommodating the objectives of new leaders.

Saying no to China’s mega-deals was not possible for Argentina’s new president. But Macri did manage to bend the terms of the hydropower dams agreement to fit his objectives. To avoid going over cost, and to dampen the negative environmental impact, China agreed to lower the capacity of dams by including fewer turbines and adding another transmission line. Conservation groups were also successful in forcing a new environmental assessment through the Argentine Supreme Court. But ultimately Macri did not stop the project altogether.

It was a clear demonstration that Chinese finance is becoming a potent tool of coercion in global affairs. From thousands of Chinese-run supermarkets to multibillion-dollar infrastructure projects, Beijing managed to exploit its significant economic influence in Argentina to rebuff the agenda of its duly elected president. And while Mauricio Macri is the latest global leader to feel the political power of Chinese trade and investment, he is certain not to be the last.

By Brendan O’boyle And Rachelle Krygier
January 24, 2017

Populists on both left and right have found common cause with the U.S.’ new president, even if their view appears to be a minority in the region. At least one group is giving Donald Trump’s presidency rave reviews so far: Latin American populists.

Whether they see shadows of their own nationalist views in Trump’s “America First” agenda, or merely sense an opportunity for improved diplomatic ties with Washington, high-profile populist figures on both the left and right have taken to Twitter and other media to express their support.

In Argentina, Trump fever has been especially high among politicians close to former President Cristina Fernández de Kirchner, who from 2007 to 2015 slapped high tariffs on imports, manipulated economic data and vilified the country’s traditional economic and political elite. Trump “is doing everything we did,” Fernández’s former trade secretary, Guillermo Moreno, said in an interview with MDZ radio. Moreno even said he believes Trump “is a Peronist” – a reference to the nationalist, union-dominated movement that has dominated Argentine politics since the 1940s.

Daniel Scioli, who narrowly lost a bid to succeed Fernández as president in 2015, likewise commended Trump’s emphasis on national industry in a Facebook post, echoing the new president’s #AmericaFirst hashtag with his own #PrimeroArgentina.

Venezuelan President Nicolás Maduro, currently besieged by a catastrophic recession and shortages of food, medical supplies and other basic goods, told reporters the new occupant of the White House had been a victim of a “brutal hate campaign” by the media. “He won’t be worse than Obama,” Maduro added.

These sympathetic views appear to be a minority among Latin American leaders – at least so far. The region is dominated by presidents such as Peru’s Pedro Pablo Kuczynski, Argentina’s Mauricio Macri and Chile’s Michelle Bachelet, all of whom are committed to trade and the prevailing globalism of recent years. Latin America’s own bouts with populist protectionism in the 2000s in Brazil and Argentina, for example, ended in recession.

Some analysts also question how sincere some of the support for Trump is – especially from the ideological left. With such statements, Maduro may be motivated less by common cause and more by a desire to seek better diplomatic ties at a time of national crisis, according to Venezuelan political analyst and consultant John Magdaleno. “Given what Trump has said and his choices for cabinet members, Maduro can presume that Trump won’t be as diplomatic as Obama and that there may be the possibility of an economic or more severe diplomatic intervention. So he’s just trying to open a space for dialogue in this moment of vulnerability,” Magdaleno told AQ.

Similar thinking may have motivated Bolivian President Evo Morales, who on inauguration day tweeted his hopes that his country could restore diplomatic relations with the U.S. by exchanging ambassadors, which they haven’t had since 2008. “We hope that with the new president of the U.S., interventions and military bases in the world end,” Morales wrote in another tweet.

One figure whose affinity for Trump is based more on shared values is Brazil’s Jair Bolsonaro, a right-wing former army officer who has placed as high as fourth in nationwide polls for the 2018 presidential race. He has been the leading candidate among wealthy Brazilians, and tapped into a nationwide anger with the political establishment amid unprecedented recession and corruption scandals.

Bolsonaro posted a video congratulating Trump on his inauguration. He had hoped to travel to Washington to attend, but said in an interview that aired the next day that it wasn’t possible. “I always rooted for Trump … I think (his victory) can help us,” he said.
Like Trump, Bolsonaro has publicly voiced support for torture and blamed the media for distorting his views. “At the end of the day, Trump stood up to the politically correct, stood up to the polling firms, stood up to the big rotten media,” Bolsonaro said admiringly in the interview.

It’s not just national politicians climbing on board. Two city council members from southern Brazil signed a letter to Trump asking to attend the inauguration, and congratulating him for winning with an agenda that “criticized the invasion of immigrants.”

Some analysts have expressed alarm over the rising Trump-ism. Prominent Brazilian economist Ricardo Amorim wrote on Facebook on Jan. 22 that Trump’s economic agenda was starkly similar to that of former President Dilma Rousseff, a leftist leader whom most blamed for leading Brazil into its recession before she was impeached in 2016.

“Protectionism to defend the interests of the country and our jobs. Exponential increase of public deficit through government spending and tax cuts. A worse than distorted relationship between the government and the private sector … Dilma called it a ‘new economic matrix’ and Trump calls it ‘make America great again,” Amorim wrote.

Unlike many other populists in the region, Mexico’s Andrés Manuel Lopez Obrador has not welcomed the Trump presidency – but he may stand to benefit from it. The former mayor of Mexico City, who is gearing up for a third presidential run, has presented himself as someone who will stand up against Trump – and in favor of Mexico’s interests. He saw his popularity spike after Trump’s victory in November. A poll from Mexican newspaper El Financiero found that López Obrador was believed by Mexicans to be the most apt to take on the likely challenges of a Trump presidency.

Indeed, while recent election results in Argentina, Bolivia, and Peru indicate that Latin America’s populist wave is in decline, many leaders believe they stand to see their political fortunes rise as a result of Trump’s victory.

As Argentina’s Moreno remarked: “Now, when we return, we won’t have the world against us.”

By Daniele Siqueira, AgRural Commodities Agrícolas
January 25, 2017


The Brazilian soybean harvest was 2.2% complete as of Jan. 19, up from 1.5% a year ago and 1.2% on the five-year average. Mato Grosso leads, with 7.5% (about 2.2 million tons), but the return of widespread rains to the state has slowed down the harvest in several areas. More rains are forecasted for the state and will probably prevent farmers from harvesting a total of 7 million tons until the end of January, as forecasted by AgRural in early December.

Mato Grosso do Sul and Goiás, also in central Brazil, had harvested 1% and 0.2% of their soybean area by Jan. 19, respectively. In Paraná (south), Brazil’s second largest soybean producing state, harvest has had a slow start. Despite the good shape of the crop, some areas planted earlier are not ready for harvest yet because they had a slower development due to lower-than-normal temperatures in October and November.

On Jan. 9, AgRural forecasted the Brazilian soybean production at 103.1 million metric tons (mmt), up 7.7 million metric tons from last year. But the soybean crop still has a long way to go in states that plant later, such as the southernmost state of Rio Grande do Sul and states in the north/northeast of the country, where farmers start harvesting only in late February or early March. Rio Grande is in good shape so far, but more rain would be welcome in the northeast, especially in Bahia. Isolated areas in Paraná, Mato Grosso do Sul and Goiás also have had some troubles due to irregular rainfall.

Summer corn harvest (35% of the Brazilian total corn production) is also beginning in Brazil (0.5% by Jan 19), but it’s behind schedule due to excessive moisture in the south. Winter corn planting (65% of the Brazilian total corn production), which is planted right after the soybean harvest, is underway in central states. Delays are expected due to rains in Mato Grosso. By Jan. 19, 2.8% of the total area estimated for south-central Brazil was planted, ahead of 0.8% a year before.

AgRural forecasts the Brazilian total corn production at 88.6 mmt, compared to 66.6 mmt last year, when the winter crop was damaged by a severe drought in central states.


The country has a good soybean crop on its way and some farmers are already harvesting their first areas. Yield reports are good and our clients there believe that the total production will surpass the USDA forecast of 9.17 mmt. Some areas planted later, however, have been struggling with lack of moisture and high temperatures.


What’s the real damage caused by excessive rains in Argentina? That’s the billion dollar question right now. In mid-January, Rosario Grains Exchange said that, at that moment, the soybean production could reach 52.9 mmt, compared to an initial forecast of 56 mmt (the USDA forecasts 57 mmt). But they admitted that the number was preliminary and unofficial, since their researchers still have much field work to do in order to assess the damage caused by floods. Also, Buenos Aires Cereals Exchange said that 770 thousand hectares of soybeans (1.903 million acres) were impacted by above-than-normal rains in December and January. Plus, 400 thousand hectares (988 thousand acres) will not be planted due to drought in the south of the grain belt and flood in central areas. Buenos Aires Cereals Exchange doesn’t have a production forecast yet. But, although those acreage numbers look pretty bad (the total soybean area initially estimated was 19.6 million hectares, or 48.4 million acres), the exchange said that several areas beaten by above-than-normal rains still have soybeans in good shape. The problem is that more rains are forecasted for central Argentina over the next two weeks. By Jan. 19, 99% of the soybean area was planted.

They’re not too concerned about corn, which has a record planted area this year (4.9 million hectares, or 12.1 million acres). According to Buenos Aires Cereals Exchange, 95% of that area was planted by Jan. 19 and about 290 thousand hectares (717 thousand acres) had been impacted by above-than-normal rains.

We don’t have clients in Argentina and we don’t go there often (we’re neighbors, but very different countries). We just track their most reliable sources, such as the exchanges. The problem with Argentina is that it’s really hard to forecast their production. They have a very wide planting window even within the same province. Example of their complex calendar: they start planting corn in late August, take a break of three to four weeks in November (for weather reasons), resume in early December and finish planting in late January. Then, they harvest from mid-February until early September. It’s an eternal loop. And no, they don’t grow two corn crops a year, like Brazil. It’s all summer corn. Crazy, right? It is very hard is to estimate corn and soybean production in Argentina.

To make a long story short, I would say that Argentina is in trouble for sure, but it’s not as bad as the market was saying until last week, at least so far. If excessive rainfall continues, however, their losses can be really big, especially because some of the flooded areas are among their best, with excellent soils and high yield potential.

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