September 2, 2010

Argentina's corn crop may hit record-high on planting gains

Argentina, the world's second-largest corn exporter, may produce a record crop next year after increasing the amount of land sown with the grain.

According to Martin Fraguio, director of the Argentine corn growers association, some estimates have planting reaching 3.5 million to 3.8 million hectares. With average yields of about 7.4 tonnes per hectare, it would produce about 26 million tonnes of corn, he said.

The previous record of about 22 million tonnes was set in the 2007-08 season, according to Agricultural Ministry data. Farmers harvested a similar amount last year after planting 2.6 million hectares, the least since the 1990-91 season, according to data compiled by the Buenos Aires Cereals Exchange.

Meanwhile, corn fell 2.25 cents, or 0.51%, to US$4.3925 a bushel at 15:39 p.m. on the CBOT. The most-active contract gained 5.05% in the three previous sessions.

Last year's crop was boosted by torrential rains from El Nino, a weather pattern that forms over the Pacific Ocean and affects climate worldwide. This year, farmers will have less water because of La Nina, which typically produces dry weather in the Southern cone of South America.

Farmers are benefiting from their experience during the drought two years ago, according to Fraguio.

The worst drought in about 70 years pared corn production to about 13 million tonnes in the 2008-09 season, according to ministry data. The drought was caused by La Nina.

Also, corn exports are limited in Argentina by government regulations and tariffs. The 13 million-tonne quota for the 2009-10 season was reached on August 27, according to the agricultural exports agency, Oncca. The government has not announced a new quota for the 2010-11 season.