July 28, 2009

Argentine wheat conditions improved across much of the farm belt last week, but the showers failed to reach many areas, the Agriculture Secretariat said in its weekly crop report late Friday (July 24).

 

Wheat planting sped up in the Bragado district of Buenos Aires, but dry soil is still stalling planting in La Pampa province and in the south of Buenos Aires.

 

"In the Bahia Blanca district (of Buenos Aires), planting is progressing very slowly as farmers wait for better conditions. The young plants are in average to poor condition," the Secretariat said.

 

According to the Buenos Aires Cereals Exchange, 80 percent of the expected wheat area had been seeded as of Wednesday.

 

The Secretariat hasn't t estimated output yet, but the exchange forecasts 2009-10 wheat area at 2.75 million hectares, down 40.2 percent on the year, and the smallest area going to wheat in over 100 years.

 

Earlier this month, the Rosario Grain Exchange said that 2009-10 wheat production is likely to total about 7.4 million tonnes.

 

That's down from 8.7 million tonnes in 2008-09, and down sharply from the average of 14.76 million tonnes over the previous five years.

 

With domestic demand estimated at 6 million tonnes, just 1.4 million tonnes of wheat is likely to be left over for export from the 2009-10 crop, the Rosario Exchange said.

 

The 2008-09 corn harvest is virtually complete, with 98 percent of the crop harvested as of July 23, the Secretariat said.

 

The Secretariat has not forecast production, but the exchange expects commercial corn production of just 12.5 million tonnes. The crop was the smallest in over a decade due to extensive drought damage.

 

Meanwhile, corn area during the 2009-10 season is likely to fall sharply due to "the bad experience with the crop last season and the higher production cost compared to soy," according to the Rosario exchange.

 

Area is unlikely to be over 2.3 million hectares, with 2009-10 production at about 16 million tonnes, according to the exchange.

 

Half of that amount will likely be set aside by the government for domestic demand, leaving just 8 million tonnes available for export.

 

Soy production is expected to rise sharply again next season.

 

Soy planting is likely to surge to between 19 million and 20 million hectares during the 2009-10 season, Sierra said in a recent interview. That would shatter the record set during the 2008-09 season, when farmers seeded 16.6 million hectares with the oilseed.

 

The Rosario exchange forecasts area planted with soy at 18.5 million hectares, with production of 50 million tonnes.

 

In addition to weather factors, the fact that soy are the only major crop in which the government doesn't control exports is spurring farmers to plant more of the oilseed. Argentina limits the export of wheat and corn to ensure domestic supply and keep down local prices.

 

Argentina's s farmers are expected to plant 2 million hectares with sunflower seeds in 2009-10, according to the Rosario exchange. Production is forecast at 3.4 million tonnes, up from about 3 million tonnes last season.