August 12, 2020

Argentina expects over six million hectares corn area

The soon-to-be planted 2020/21 corn crop of Argentina is seen at around 6.3 million hectares, same as the area of the recently gathered crop, thanks to attractive prices, local growers and analysts said, Reuters reported.

Argentina is the world's No. 3 corn exporter, with output of about 50 million tonnes in the 2019/20 crop year, just 600,000 tonnes off its all-time record high season, according to the Buenos Aires Grains Exchange.

"Corn futures prices are good and so are profit margins. The attraction continues. So we expect to repeat the same planting area that we had last year," said Alberto Morelli, president of the MAIZAR corn industry group. Planting of the 2020/21 corn crop is expected to start in earnest next month.

Ricardo Baccarin, vice president of the consulting firm Panagricola, also forecasts that the area sown with corn for the new season will be around 6.3 million hectares.

"Whoever can plant corn early in the season has a good reward ahead of him," he explained.

On the local MatbaRofex futures market, the April 2021 contract for corn-the benchmark for the new season-closed on Monday at US$137.5 per tonne. Meanwhile, corn for immediate delivery closed at US$130 per tonne on the Rosario grains exchange.

"The price relationship for 2021 in terms of gross margin is favourable for corn," said Pablo Adreani, head of consulting firm AgriPac. He said he believes that corn area could reach 6.3 to 6.4 million hectares, compared with his estimate of six million hectares in the 2019/20 season.

"The logic of the farmer should be to increase corn planting and decrease soybeans," added Adreani, referring to Argentina's main cash crop, which competes for area in the Southern Hemisphere's spring planting season.