June 18, 2009
Argentina exchange cuts wheat forecast 7.5 percent, down 35 percent on-year
Argentina's Buenos Aires Cereals Exchange cut its wheat forecast another 7.5 percent on Wednesday (June 17), marking the lowest amount of area seeded with the grain since records have been kept.
Farmers are expected to plant just 2.96 million hectares with wheat this season, a drop of 35 percent from last year.
Continued dry weather across much of the Pampas farm belt has stunted planting, with the optimum period for seeding already past, the exchange said.
In addition to the dryness, farmers are hesitant to plant the crop due to low prices due to government intervention in wheat markets. They also face high financing costs and the economic strain caused by losses to the 2008-09 soy and corn crops due to drought.
"All signs are looking bad for wheat," the Buenos Aires Cereal Exchange's top climatologist, Eduardo Sierra, told Dow Jones Newswires recently. "If you ask seed sellers who's buying wheat, they say nobody."
