September 22, 2008


Argentina wheat yields seen down 10 to 15 percent on-year


Yields from Argentina's 2008-09 wheat crop are likely to be down between 10 and 15 percent from last season due to continued dry weather, the Buenos Aires Cereals Exchange said in its weekly crop report Friday (September 19).


The poor conditions in the northern areas may also lead some farmers to abandon wheat fields. Production may fall by as much as 25 percent from the 16 million tonnes grown last season, the exchange said.


The US Department of Agriculture sees Argentina growing just 12.5 tonnes of wheat this season.


Dry weather prevented planting in many cases, and the 4.48 million hectares sown is 18.5 percent less than last season. This season marks the smallest area going to wheat in 34 years, according to the exchange.


However, weather models predict increased rainfall at the beginning of October and a return to normal soil moisture levels, the exchange said. The crop may see a partial recovery with increased rainfall, and conditions are good in the important wheat areas to the south of Buenos Aires Province.


Argentina's 2008-09 corn planting continues to progress slowly because of dryness, which caused the exchange to trim its forecast by 150,000 hectares.


Planted area will total just 2.7 million hectares, down 15.6 percent from last year, it said.


To date, farmers have planted just 4 percent of the area seen going to corn, down 1.6 percentage points from this time last year.


The dry weather and higher fertilizer costs are spurring the shift away from corn, according to the exchange.


The USDA sharply lowered its forecast for Argentina's 2008-09 corn output to 19 million tonnes, down 3 million tonnes from last month's forecast.


Sunseed planting made little progress again last week due to the continued dry weather, the exchange said.


The dry weather and falling international sunseed prices are likely to cause a reduction in estimates for final planting area, the exchange said.


To date, 8.2 percent of the forecast 2.79 million hectares have been planted, four percentage points behind the planting pace at this time last year, according to the exchange.


Argentina hasn't started 2008-09 soy planting, but the area going to the seeds is expected to rise sharply this season as the beans take up the slack from decreased wheat and corn area.


The other week, the USDA raised its forecast for new crop soy production by 1 million tonnes to a record 50.5 million tonnes.

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