Argentina's Drought Continues to Hit Corn, Soy

Why It Matters

The reduced harvest tightens global corn and soybean supplies, pressuring export‑driven revenues and driving price volatility in key international markets.

Key Takeaways

• Corn yields down 0.7 t/ha in drought-hit regions.
• Bage cut corn forecast by 1 million tonnes.
• Soybean core area loses >500,000 tonnes to drought.
• Expected soybean output 48 million tonnes, below 2024‑25.
• Some soy fields face 20‑60% loss, unharvestable.

Pulse Analysis

The Argentine drought that intensified in early February has already dented the country’s corn and soybean harvests. In Córdoba, where corn is being harvested, farmers report 10‑20 % losses, pushing average yields to 6.4‑7 t/ha, below last year’s 7.15 t/ha. Meanwhile, the core soy belt—spanning northern Buenos Aires, southern Santa Fe and Córdoba—faces a shortfall of more than 500,000 t, with yields slipping to roughly 3.8 t/ha. Although abundant rains in late 2025 raised soil‑moisture reserves, the current dry spell is eroding those gains.

Argentina accounts for roughly 12 % of global corn exports and a similar share of soybean shipments, so the revised Bage corn forecast of 57 million t and the BCR soybean estimate of 48 million t reverberate through international commodity markets. Futures for both grains have edged higher as traders price in tighter supplies, while import‑dependent regions such as the Middle East and Southeast Asia monitor Argentine output closely. The 1 million‑tonne cut in the corn outlook and the projected 1.5 million‑tonne dip in soybeans relative to the previous year tighten global balance sheets and could spur price volatility.

Looking ahead, the extent of the drought’s damage will hinge on rainfall patterns through the remainder of the harvest window. If precipitation improves, the soil‑moisture legacy from 2025’s wet season may cushion further losses, allowing Argentina to approach a near‑record corn crop despite the current setbacks. Conversely, prolonged dryness could force additional acreage to be left unharvested, prompting the government to consider emergency export controls or support measures for affected producers. Stakeholders will watch policy responses and weather forecasts closely, as they will shape the supply dynamics that drive grain prices into the next marketing year.