CHICAGO/CHIVILCOY: Argentina’s worst drought in decades is shrivelling farmers’ fields, sending grain prices soaring and forcing Bunge Ltd and other major crop processors to crush fewer oilseeds into feed that fattens livestock around the world. The drought in Argentina, the world’s No. 3 exporter of corn and soybeans, has not ended a scenario of global oversupply left by years of bumper harvests driven by good weather and genetically engineered crops. But combined with separate bouts of dryness threatening crops in US Plains states and South Africa, losses in Argentina are eating into global reserves and prompting global buyers to accelerate purchases. Farmers in the US Midwest are scrambling to sell grain that has been held in storage for months to take advantage of prices rallying on Argentina’s struggles. “You never wish a drought on another country but sometimes that’s what it takes,” said Illinois corn and soy grower Rob Schaffer, who is stepping up sales of crops to take advantage of climbing US prices. “It’s basically been a gift.” Thousands of miles away in the rural Argentine town of Chivilcoy, farmer Bernardo Romano has the opposite point of view. His soybean and corn plants stand at only half their typical height, starved of rain. Corn ears are 70 percent smaller than normal about a month before harvest is set to begin. “This is going to have a very big impact on the regional economy,” he said, adding that farmers were praying for rain to mitigate more losses to late-planted crops. Rains this growing season have only been a quarter of normal, Romano said. At most, he expects his soybeans to produce a third of their normal yield. The Buenos Aires grains exchange cut three million tonnes off its soy forecast on Thursday, putting it about a quarter smaller than last year’s crop. Nick Of Time: Such losses ripple around the world because Argentina is also the world’s top supplier of soybean meal, used to feed livestock, and soy oil. Soymeal and soybean futures contract prices on Friday reached their highest price since the summer of 2016, while corn futures touched an eight-month high. The rally comes in the nick of time for US farmers. As growers in the Midwestern Corn Belt prepare for spring planting, farm land rents are coming due. So, too, are bills for inputs, such as fertilizer and seeds which have remained stubbornly high. US farmers and traders are profiting from increased export demand, with global buyers shifting business away from Argentina. Over the past seven weeks, exporters have sold nearly 12.5 million tonnes of US corn to foreign buyers, in the busiest stretch of sales in 23 years, according to US Department of Agriculture data. Merchants that make money buying, selling and processing harvests, such as Archer Daniels Midland Co, Bunge and Cargill Inc, have also benefited from higher margins. On Friday, estimated US profit margins for processing one bushel of soybeans into soymeal and soyoil reached more than $1.60 per bushel on the Chicago Board of Trade, a level seen only once before, four years ago. Margins have also improved in Brazil and Europe, allowing global processors to lock in profits. Published in Daily Times, March 6th 2018.