With all eyes on South American - waiting to see if they can make up for the US crop deficit, I thought we'd take a quick look at their weather conditions. Rich Nelson, Allendale Inc. Chief Strategist, addressed this issue in their monthly webinar last week.

Nelson said just ahead of planting, Brazil, the main contender in terms of soybean production and exports, experienced a rainfall deficit. In September, Santa Catarina, Parana, Sao Paulo and Goias were 34 to 66 per cent below-normal rainfall. And Mato Grosso, Brazil's number one soybean producing state, had 85 per cent less-than-normal rainfall during the same time.

In October, the situation has improved a little bit in terms of the sub areas. Two states - Grande do Sul and Santa Catarina - are now 49 and 45 per cent above normal precipitation, and Mato Grosso has also seen a good increase in rainfall, now at 77 per cent above normal. This indicates that the situation has improved a little for Brazil, but Nelson said it's not what we want to see in terms of a good planting potential just yet.

As of October 25, Brazil's soybean plantings were at 28 per cent, which is well below 2011's pace of 41 per cent, but in-line with the 5 year average of 24 per cent planted. Nelson said that while Brazil's moisture is a concern, it's not a major concern yet because planting pace is very close to normal.

As for Argentina's soybeans, Cordova, the top soybean producing state, saw significant rainfall in September putting them at 138 per cent of normal rainfall. Cordova and three additional states of importance, Buenos Aires, Santa Fe and Entre Rios, have seen massive rains in the past few weeks pushing rainfall above normal in all areas.

Several areas are even experiencing significant problems with flooding. Nelson said some are suggesting a loss of 20 per cent in corn production and 10 percent in soybeans is possible.

For more information from the Allendale Inc webinar including how global events are impacting the soy complex, click here.

Have a great week!