November 12, 2007

 

Record grain output from Argentina seen on high prices, rain

 

 

Argentina is set to produce record grain output this season due to excellent weather conditions over the past months and high grain prices that are driving farmers to seed expanded area, according to a Dow Jones Newswires poll of the country's top agricultural analysts.

 

Persistent rainfall over the past months has boosted the developing wheat crop and created ideal planting conditions for corn, sunseeds and soy, the analysts said.

 

Wheat

 

The analysts upped their forecasts for 2007/08 wheat production by 1 million tonnes due to the ideal growing conditions.

 

Panagricola S.A. analyst Ricardo Baccarin sees 15 million tonnes of wheat coming from the Pampas this season, while Matias Drago of Agropuerto S.A. pegs production at 14.5 million tonnes.

 

Agripac Consultores analyst Pablo Adreani is even more optimistic, forecasting output of 17 million tonnes.

 

The US Department of Agriculture sees 14.7 million tonnes of wheat coming from Argentina this season, while the Agriculture Secretariat is forecasting 14.5 million-15.3 million tonnes.

 

"The overall crop condition is excellent. Rains throughout the major producing areas in the last few weeks, combined with high temperatures will likely produce higher yields than were seen last year," the USDA said Thursday.

 

As of last Friday (November 9), 5.5 percent of the 2007/08 wheat crop had been harvested, 4.3 percentage points behind the pace at this time last year, according to the Buenos Aires Cereals Exchange.

 

According to the exchange, about 75 percent of the wheat crop is in good or very good condition, about 18.5 percent is in average condition, 6 percent is in poor condition and 1.5 percent is in very poor condition.

 

Soy

 

Soy area is also seen rising, although yields are not expected to be as high as last season when heavy rainfall drenched the Pampas during key growing periods, according to the analysts.

 

AgriPac's Adreani upped his forecast for 2007-08 soy production by almost 2 million tonnes to 52 million tonnes.

 

Production will be up due to increased area and good soil-moisture conditions which will allow planting during optimal periods, Adreani said.

 

Agropuerto's Drago said that soy area is expected to rise 2 percent from last year's record due to a significant increase in prices. Agropuerto sees 2007/08 soy production of 46.5 million tonnes.

 

Panagricola's Baccarin sees 48 million - 48.5 million tonnes of soy grown this season.

 

As of last Friday, farmers had planted 16 percent of area seen going to soy this season, according to the exchange.

 

Corn

 

Corn seeding will also rise due to good moisture levels during the planting period, Adreani said. Adreani sees 2007/08 corn production of 26 million tonnes.

 

Drago pegged 2007/08 corn production at 25.5 million tonnes, while Baccarin forecast 25 million tonnes. The USDA has forecast this season's corn production at 24.5 million tonnes.

 

The USDA said Thursday that "harvested area will increase in 2007-08 by around 6 percent (on the year). However, it is unlikely that yields will reach levels attained in 2006-07 due to expectations that some of the production area will suffer from limited rains during the growing season due to effects of La Niña."

 

As of last Friday, farmers had planted 72.3 percent of the 2007/08 corn crop, 8.3 percentage points ahead of the pace a year earlier, according to the exchange.

 

Sunseed

 

Sunseed planting is also expected to increase sharply, as higher prices spur planting.

 

The area going to sunflower seeds will rise 12 percent from last season, with yields rising 20 percent as last year's crop suffered from drought during key growing periods, Drago said. Drago sees production of 4.6 million tonnes.

 

Adreani and Baccarin are more optimistic, pegging this year's sunseed production at 4.8 million tonnes.

 

The USDA forecasts 4.5 million tonnes of sunseeds coming from the pampas in the 2007/08 season.

 

As of last Friday, farmers had planted 58.8 percent of the area seen going to sunseeds, according to the Buenos Aires exchange.