May 25, 2009

Argentine wheat planting continues to struggle due to insufficient rainfall, the Agriculture Secretariat said in its weekly crop report Friday (May 22).

 

"Last week's rain was insufficient to relieve the lack of moisture across much of the farm belt," the Secretariat said.

 

"In general, the first centimetres of soil are dry. Deeper down, the volume of accumulated water varies according to the area," the Secretariat said.

 

Wheat planting is progressing slowly due to very low soil moisture levels and farmers' resistance to plant the crop because of low prices caused by government intervention in wheat markets.

 

The Buenos Aires Cereals Exchange expects wheat area to total just 3.7 million hectares, down 18.6 percent on the year and the smallest area since records have been kept.

 

Weather models predict a residual La Nina effect through late fall and early winter. That could lead to an early end to showers, higher-than-normal temperatures and a rapid drying of the soil, further reducing output, according to the exchange.

 

As of May 21, 96 percent of the 2008-09 soy crop had been harvested, according to the Secretariat.

 

The crop suffered weather problems throughout the growing season, with the high temperatures and persistent drought cutting yields, according to the Secretariat.

 

Seed samples from harvested fields are showing low weight and a high amount of green grains, according to the Secretariat.

 

This week, the Buenos Aires Cereals Exchange trimmed its forecast for soy production to 32.2 million tonnes, down 600,000 tonnes from last week's estimate.

 

The forecast marks the lowest soy output in four years. Average yields are down over 30 percent from last season.

 

But some see the losses as even more severe. The Argentine Rural Confederation, or CRA, on Tuesday estimated production of just 30.5 million tonnes, down sharply from initial expectations of about 50 million tonnes.