January 30, 2009

 

Argentina exported 716,829 tonnes of wheat in December, down from 1.35 million tonnes shipped during December 2007, according to Senasa.

 

Wheat shipments during all of 2008 totalled 8.91 million tonnes, down from 9.51 million a year earlier.

 

In November 2008, agricultural trade office Oncca authorized 675,011 tonnes more wheat for export, leaving 1.1 million tonnes from the old crop available for export.

 

However, new-crop exports are expected to be sharply limited this season because of a decline in planted area this season and because the wheat crop is struggling due to the worst drought in 50 years. That means not much is expected to be much left over for export.

 

On Jan. 21, the Agriculture Secretariat cut its forecast for 2008-09 wheat production to 8.3 million tonnes from 9 million tonnes forecast in December.

 

The Buenos Aires Cereals Exchange estimates the 2008-09 wheat crop will fall 46 percent from last season to 8.7 million tonnes, the smallest crop grown in 20 years.

 

The area harvested was the lowest seen in the last 30 years, according to the exchange.

 

Wheat production is down sharply from the 16 million tonnes grown last season.

 

Estimates suggest domestic demand will be about 7 million tonnes this year, meaning that very little likely will be available for export over the 1.2 million tonnes of new crop exports already approved by the national agricultural trade office.

 

Early this week, Oncca confirmed that it is disallowing wheat export permits to ensure domestic consumption, which the agency estimates at a minimum of 6.1 million tonnes this year.

 

Oncca must approve all grain and beef exports and only clears shipments once stocks sufficient to meet domestic demand, as set by the government, have been confirmed.

 

With domestic consumption pegged at 7 million tonnes that will leave between 1.3 million to 1.7 million tonnes left for export, if current forecasts hold. That will be down sharply from the 10.2 million tonnes of wheat exported from the 2007-08 crop, according to the US Department of Agriculture.

 

Argentina exported 248,081 tonnes of corn in December, down from 280,531 tonnes shipped in December 2007, according to Senasa.

 

Corn exports during all of 2008 reached 15.42 million tonnes, up from 14.71 million in 2007.

 

There is virtually no old-crop corn available for new export sales, according to Oncca, and Argentina's corn exports also are likely to be significantly lower next season.

 

A severe drought has cut expected 2008-09 corn production, with the latest estimate from the Buenos Aires Cereals Exchange suggesting output will plunge by 33 percent to 40 percent to just 12.3 million to 13.7 million tonnes from 20.5 million tonnes in 2007-08. The USDA expects 18 million tonnes of corn to come from Argentina this season.

 

Higher production costs for corn relative to soy and dry weather early in the planting season are blamed for a decline in the area planted to corn this season. Corn planting will fall to 2.44 million hectares this season from 3.2 million hectares last season, according to the exchange's latest estimate.

 

About 14.7 million tonnes were exported from the 2007-08 crop. Domestic demand is currently pegged at 6.1 million tonnes, but the amount withheld for domestic consumption may be increased somewhat due to increasing use of corn in feedlots, Echegaray said.

 

If the USDA's forecast for Argentina corn production holds and the domestic-use quota is unchanged next year, that would leave just 11.9 million tonnes available for export.

 

Based on corn production figures from the Buenos Aires Cereals Exchange, the amount available for export could drop to between 6.2 million and 7.6 million tonnes.