Rains to strongly benefit Argentina corn crops

 

 

Argentina, one of the world's leading corn exporters, may increase output by more than 42% this year from previous estimates as spring rains boost yields to a record.

 

The harvest starting next month may produce 17 million tonnes, compared with an estimate of 12 million tonnes as recently as December, Martin Fraguio, executive director of Maizar, said on January 5.

 

Corn available for export this year will rise to more than nine million tonnes compared with 7.5 million tonnes last year, he said.

 

Higher Argentine corn shipments overseas would erode exports from the US, said Dan Cekander, director for grain research at Newedge USA LLC in Chicago. Corn prices may drop 5-10 cents, he said.

 

Corn futures for March delivery rose three cents or 0.7% to US$4.2175 a bushel in Chicago. It was the highest closing price for the most-actively traded contract since June 18.

 

Fraguio said this year's yields are likely to be the best ever, at about eight tonnes per hectare. Yields, on average, have been about 6.6 tonnes per hectare during the past five years, according to the Ministry of Agriculture.

 

The Buenos Aires Cereals Exchange estimated this year's corn production to total 15.8 million tonnes.

 

Argentina's output in the past season fell to 13.1 million tonnes because of drought. The dry weather was the worst in a century, causing the harvest to fall from a record 22 million tonnes a year earlier. This year's crop covers two million hectares, the smallest in 20 years.

 

Corn growers have requested a meeting with officials of the national agricultural exports control office (Oncca) in Buenos Aires to argue that the government should ease restrictions on exports since domestic demand of eight million tonnes will be met.

 

Corn exports require Oncca permits, as do soy, wheat, sunflowers and some other agricultural products.

 

The government has limited exports of beef, corn and wheat since 2006 to provide cheaper food to the domestic market. No grain exports were allowed from June 24 through September, when the government ended the export ban, without saying how much corn it would allow to be shipped overseas.

 

This year's exportable surplus will also be boosted by increases in production of sorghum and feed barley, which will replace domestic corn consumption, Fraguio said.

 

Sorghum production is expected to total five million tonnes and feed barley production about 400,000 tonnes. About 1.2 million to two million tonnes of sorghum will be exported, with the rest complementing or substituting corn in the domestic market, Fraguio said.