July 4, 2007

Argentina completes 40 percent of 2006/07 corn planting

Argentina corn planting for marketing year 2006/07 is over 40 percent complete. Post forecasts wheat area and production at 5.2 million hectares (MHAS) and 13.5 million tonnes respectively, according to the Foreign Agricultural Services (FAS) of the US Department of Agriculture (USDA).

FAS/Buenos Aires forecasts MY (marketing year) 2006/07 corn production at 15.3 million tonnes, based on yields similar to last year. Post forecasts exports at 8.7 million tonnes, slightly higher than last year based on higher production. Additionally, post forecasts MY2006/07 corn consumption up slightly to 5 million tonnes due to increased poultry production and increased demand from the biofuels (ethanol) sector. As of October 20, corn planting was approximately 42 percent complete.

Total planted area for grain is estimated at 2.52 million hectares. Analysts set production between 15 to 15.7 million metric tonnes. This production number can be broken down into exportable supply (8.5 to 8.7 million tonnes) and domestic consumption (6.5 to 6.7 million tonnes).

To date, export sales commitments total 5.6 million tonnes, significantly higher than last year's export sales commitments on the same date, which totalled only 585,000 million tonnes. The reason for the extraordinary increase in commitments can be attributed to exporters'  fear of Argentine Government (GOA) actions that could slow down exports and in order to maintain stable domestic prices. Similar actions were taken in the wheat market in May 2006 when the GOA stopped export registrations for several days. To ensure exports will not be disrupted in such a fashion this year, many exporters are pre-registering exports of corn that has yet to be planted.