November 20, 2009

Spotty rainfall managed to reach some of the driest areas on the western fringe of Argentina's farm belt over the last week, pushing the Buenos Aires Cereals Exchange to hold its forecast for 2009-10 soy planting at 19 million hectares.

 

In addition, continued showers are expected over the next few days, restoring needed soil moisture levels, the exchange said in its weekly crop report Thursday.

 

Soy planting is expected to hit a new record this year.

 

The severity of the drought in the west has raised concerns that not all of the forecast area will actually be planted, but those worries are unfounded, Eduardo Sierra, the chief climatologist for the Buenos Aires Cereals Exchange, said this week.

 

A decrease in corn and sunflower seed area due to the late arrival of spring showers will be taken up by soy, he said.

 

As of Thursday, farmers had planted 44.2 percent of the area expected to be planted with soy this season, but the pace was slowed over the past week due to heavy rainfall.

 

While it'd very early for predicting output, Sierra said that conservative estimates range between 48 million and 50 million tonnes, compared with the previous record of 47.5 million tonnes grown in 2006-07.

 

The El Niño phenomenon, a warming of surface temperatures in the Pacific Ocean off South America, is already in place and building in intensity. Farmers in the Pampas are banking on the increased rainfall that comes with El Niño to spur excellent crop development.

 

Some analysts are talking about a crop of as much as 55 million tonnes. But the greater reliance on late soy will limit potential yields to some degree, Sierra said.

 

Wheat conditions vary widely, with the crop in good shape in the central areas. But recent showers in the western and southern fields came too late do provide much help, the exchange said.

 

The exchange's production forecast of 7.75 million tonnes is likely to be lowered due to continued dryness and pests in the south of Buenos Aires province, according to the exchange.

 

Argentina's farmers planted the smallest amount of wheat ever recorded this season.

 

With domestic demand pegged at 6.5 million tonnes by the government, just 1.25 million tonnes of wheat are likely to be left over for export from the 2009-10 crop.

 

As of Thursday, farmers had harvested 10 percent of the planted area, according to the exchange.

 

Corn planting and development of the young crop got a boost over the past week as showers reached many areas that had been suffering from drought, the exchange said.

 

The improved situation led the exchange to hold its forecast for commercial corn area at 1.875 million hectares.

 

To date, 70.6 percent of the crop has been planted, with the pace slowing over the past week due to soggy conditions.

 

The Buenos Aires Exchange hasn't estimated production yet, but the Rosario Grain Exchange forecasts total corn production at 13 million tonnes.

 

The government has pegged domestic consumption of corn from the 2009-10 crop at 8 million tonnes, leaving just 5 million tonnes available for export, according to the Rosario exchange.

 

The exchange again trimmed its forecast for 2009-10 sunflower seed planting, lowering the estimate to 1.49 million hectares compared to 1.66 million hectares forecast last week.

 

Drought in the southern and western fields has prevented planting and pushed farmers to switch to other crops. Continued dryness may lead to additional area forecast reductions, the exchange said.

 

Planted area is expected to be down 33.2 percent on the season.

 

To date, 65.2 percent of the forecast area has been planted, according to the exchange.