October 20, 2008

    

 

Argentina will plant 18.2 million hectares with soy this season, a 300,000-hectare increase from its forecast last week, the Buenos Aires Cereals exchange said in its weekly crop report Friday (October 17).

 

With planting conditions excellent due to recent rainfall, farmers are seen sowing 8 percent more area with soy this year over last year's record 16.9 million hectares, according to the Exchange.

 

This week the Agriculture Secretariat forecast that 17.8 million to 18.2 hectares would go to soy this season.

 

"High input costs for corn and sunflower seeds will see a shift to soy. On the other hand, a lot of wheat fields which were abandoned (due to drought) will be planted soy, (and) the oilseed will continue to take over lands previously used for cattle pastures," the Exchange said.

 

Corn planting is progressing rapidly due to increased soil moisture levels, with farmers so far seeding 50 percent of the 2.7 million hectares seen going to corn. The planting pace is 4.2 percentage points behind that of last season.

 

However, there are concerns that farmers may turn away from the crop if conditions deteriorate.

 

"The area may be reduced in the coming months ... due to falling prices and the high cost of fertilizers," the Exchange said.

 

Argentina's wheat crop in the southern areas benefited from increased rainfall, but the struggling crop in the northern areas suffered even more due to scattered hail storms, the Exchange said.

 

Final production is expected to be down 28 percent from the 16 million tonnes grown last season, according to the Exchange.

 

Dry weather prevented planting in many cases, and the 4.48 million hectares sown is 18.5 percent less than last season and the smallest area in 34 years. In addition, three to four percent of the crop was lost, and yields are expected to be down 12-13 percent, according to the Exchange.

 

The Exchange again trimmed its forecast for 2008-09 sunflower seed planting, lowering it to 2.34 million hectares, a 3.3 percent drop from last week's forecast and down 13.3 percent on the year.

 

Drought prevented planting in many northern areas, and falling sunseed oil prices have spurred a shift away from the crop.

 

To date, farmers have planted 17.9 percent of the crop, 11.7 percentage points behind the pace at this time last year, according to the Exchange.