Crop Protection South America Monthly Report

The drought in South America happened at the beginning of 2012 appears to be the worst drought in 25 years in this region and has led to a boost in grain prices globally. It is not surprising that futures price of corn has climbed by about 40% in July 2012, as the continuing dry weather reduced expectations on yields of cereal crops. Meanwhile, soybean's futures price has set the record, while wheat futures price has not been very far from the record level.

Although the national grain market will inevitably face the great pressure because of the crop reduction, farmers from South America will have the potential to increase their crops planting area to some extent supported by the high international price of grains, as well as the higher demand from the foreign grain importing countries which are generally importing large amounts of grains from South America, such as China. Currently farmers in South American countries such as Brazil and Argentina, are positively preparing for the next crops growing seasons.