February 17, 2011

 

Argentinean wheat output may rise; corn, soy to fall

 

 

Argentina's corn and soy production could fall this year but the crop prospects have improved notably in the last few weeks and wheat output is sharply higher than on-year, a senior industry executive said Wednesday (Feb 16).

 

"The situation for corn and soybeans is no longer as bad as it was a few weeks earlier because of recent rains and lower temperature," Freddy Pranteda, Director of grain trading company Cosur SA, said.

 

He said less evaporation and continuous rains have saved several million tonnes of Argentina's standing crop of corn and soy.

 

He said Argentina's output of soy may fall to 48-49 million tonnes from 55 million tonnes.

 

Earlier, market participants were concerned that Argentina's corn output could fall to 14 million tonnes and output of soy to below 44 million tonnes because of dry weather.

 

However, lower output will drag down exports of corn to 11 million tonnes-12 million tonnes from 16 million tonnes last year and that of soy to 9-10 million tonnes from 12 million tonnes, he said.

 

Argentina has already sold 6.5 million tonnes of new crop soy to China for the April-July period, he noted.

 

Pranteda said wheat output is estimated to jump to 15 million tonnes from 8.5 million tonnes because of exceptionally high yields in some regions.

 

Wheat is harvested in October and November, while corn and soy are harvested in March and April.

 

Dry weather just ahead of the harvest late last year gave a boost to wheat yields, said Pranteda.

 

He said in some regions the wheat yields almost doubled to seven tonnes a hectare from 3.5-4 tonnes. Last year the wheat crop was affected by drought in some areas, he noted.

 

However, the protein content in wheat is lower this year by 1-1.5 percentage points at 11%-11.5%.

 

Argentina's wheat exports are likely to almost double to around 9-10 million tonnes this year and some of the low-protein grades may be shipped to Asian countries such as Bangladesh, Pranteda said.

 

It is rare for South American wheat to be sold in South Asia, but tight global supply has prompted Bangladesh to buy at least 150,000 tonnes of Brazilian wheat.

 

He said Argentina has already committed sales of five million tonnes of wheat from a government-sanctioned export quota of six million tonnes and traders are now seeking fresh licenses.

 

Argentina is doing its bit to fill in the gap left by the ban on grain exports by Russia last year, as it is shipping out wheat not only to neighbouring Brazil but also to Morocco, Tunisia and Algeria, he noted.