Argentine corn crop may plant smallest crop in two decades; soy up

 

 

Argentina, the world's second-largest corn exporter, may plant the smallest crop in two decades as the government delays plans to lift a ban on exports.

 

President Cristina Fernandez de Kirchner has yet to make good on a September 10 pledge to allow overseas shipments of corn, prompting farmers to plant more soybeans, Martin Fraguio, executive director of corn exporters and grower association Maizar, said in a September 24.

 

Argentina will sow 1.88 million hectares of corn this year, according to the Buenos Aires Cereals Exchange - the least since 1989, when hyperinflation led farmers to run out of cash. The country is set to fall behind Brazil, becoming the world's third-largest corn-exporter amid rising global demand, the US Department of Agriculture (USDA) said.

 

Soy futures for November delivery climbed 6.5 cents, or 0.7 percent, to US$9.26 a bushel September 25 on the CBOT. Corn futures for December delivery fell 2.5 cents, or 0.7 percent, to US$3.34 a bushel on the CBOT, capping a 5 percent gain for the week, the steepest rally in eight weeks.

 

On the other hand, Argentina may produce a record soy harvest of more than 50 million tonnes next year as farmers switch to the oilseed, Ernesto Crinigan, president of the Buenos Aires Cereal Exchange, said in an August 28.

 

According to Argentina's export control office Oncca, it has not permitted any corn grain exports since June 24. The export registry has been shut for more than 90 percent of the past year, Fraguio said. Since 2006 the government has limited exports of beef, corn and wheat to provide cheaper foodstuffs in the Argentine market.

 

USDA cut its forecast for this year's exports from Argentina by 1 million tonnes, to 7 million tonnes in August, as farmers grow more soy.

 

The corn planting season runs from August through December. Harvesting starts in February and goes through August, while the soy planting season begins in September and runs through January. Harvesting starts in February and runs through June.

 

Argentina's farmers harvested 13.2 million tonnes of corn between February and June, a 40-percent decline from the 22 million tonnes harvested the year before, the Agriculture Secretariat said on August 14.

 

The decline in production in the past year was due to drought, Fernandez said. The past year's dry weather was the worst in a century, according to the Buenos Aires Cereals Exchange. Earlier this year, farmers planted the smallest wheat crop ever.

 

Warmer, wetter weather brought by El Nino is bringing more favourable conditions to farmers to plant soy and corn this year, the exchange said September 23. Farmers are likely to plant a record soy crop, taking advantage of more soil humidity and better outlook for the oilseed, Crinigan said last month.

 

Farmers are also favouring soy over corn because Argentina's cattle and dairy industries, the country's largest consumers, are losing money because of export controls and drought, Fraguio said.