August 24, 2009

Argentina's young wheat crop continues to need increased rainfall, particularly in the northern areas, the Agriculture Secretariat said in its weekly crop report Friday (August 21).

 

Scattered showers across the southern and central areas of the farm belt this week provided some relief, but more is needed.

 

Conditions are much worse in the northern areas. In the Laboulaye district of Cordoba province, "another week without rain, with low temperatures and strong winds, affected even more the slow development and the already poor state of the seedlings," the Secretariat said.

 

According to the Buenos Aires Cereals Exchange, continued dryness could cause total output fall even further than the already low expectations.

 

As of Wednesday, farmers had planted over 98 percent of the forecast 2.75 million hectares seen going to wheat, according to the Buenos Aires exchange.

 

The worries over yields come on top of a sharp drop in expected wheat area this season.

 

Nationwide, wheat area is expected to be down 40.2 percent on the year and represents the smallest area going to wheat in over 100 years.

 

Neither the Secretariat nor the Buenos Aires exchange have forecast production yet, but the Rosario Grain Exchange says 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, according to the Rosario Exchange.

 

Continued dry conditions in the north are slowing sunflower seed planting and rain is needed for seeding to advance, the Secretariat said.

 

According to the Buenos Aires exchange, 5.1 percent of the forecast sunseed area had been planted as of Wednesday.

 

The Buenos Aires exchange has forecast sunseed area at 2.22 million hectares, significantly higher than the 2 million hectares expected by the Rosario Grain Exchange. The Rosario exchange forecasts production of 3.4 million tonnes, up from about 3 million tonnes last season when yields suffered due to drought.

 

The first 2009-10 corn planting has started, with forecast area expected to fall from last season, the Secretariat said.

 

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 8 million tonnes available for export, according to the Rosario exchange.

 

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, according to private analysts. 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.