August 17, 2012

Argentina cuts 2012-13 wheat area forecast

Argentina's 2012-13 wheat area outlook has been trimmed by the country's Agriculture Ministry on Thursday (Aug 16) to 3.7 million hectares from 3.82 million hectares a month ago, further dimming the crop's prospects.

The South American country is the world's No. six wheat exporter and the top supplier to neighbouring Brazil. But the area planted with wheat is seen shrinking by about 20% this season, largely due to commercial problems.

"There were practically no rains during the month of July, which made it impossible to finish seeding all the area that was initially forecast," the ministry said in its monthly crop report.

Farmers complain that government intervention in grains markets has slashed the profitability of wheat, pushing them towards cultivating more corn and soy.

Argentine growers planted 4.63 million hectares with wheat in the 2011-12 crop year, producing 13.19 million tonnes.

The USDA forecasts that Argentine wheat production will fall to 11.5 million tonnes in the 2012-13 season, down from 15 million tonnes a year earlier.

In its report, the local ministry held its forecast for 2011-12 soy production at 40.1 million tonnes and kept its 2011-12 corn output projection at 21 million tonnes.

It did not give estimates for 2012-13 corn or soy area.