August 3, 2009

Argentine wheat conditions improved significantly over the last week across much of the farm belt, although dryness persists in some of the western and northern areas, the Agriculture Secretariat said in its weekly crop report Friday (Jul 31).

 

In the areas around Bahia Blanca district in Buenos Aires Province, planting is still stalled, but not because of drought anymore. The soil is too muddy for farm machinery to plant, the Secretariat said. Still, the young crop in Bahia Blanca is showing signs of drought damage, with most in average to bad condition.

 

The Secretariat hasn't forecast wheat production or planting progress, but according to the Buenos Aires Cereals Exchange, 86 percent of the forecast 2.75 million hectares forecast for wheat has been planted. Area is expected to be down 40.2 percent on the year, representing 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 six 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, according to the Secretariat.

 

The Buenos Aires exchange pegs commercial corn production at 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 Rosario exchange.

 

Half of that amount will likely be set aside by the government for domestic demand, leaving just eight million tonnes available for export, according to the Rosario exchange.

 

The exchange hasn't forecast 2009-10 sunflower seeds yet, but the Buenos Aires exchange estimates farmers will plant 2.22 million hectares of sunflower seeds, up three percent from last year.

 

The Buenos Aires exchange's forecast is significantly higher than the two million hectares expected by the Rosario Grain Exchange. The Rosario exchange forecasts production of 3.4 million tonnes, up from about three million tonnes last season.

 

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, Buenos Aires exchange chief climatologist Eduardo 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 2009-10 soy planting of 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.