October 31, 2007
Argentina corn output seen up, soy forecasts mixed
Argentina's 2007/08 corn crop could exceed last season's record output by more than 10 percent, but analysts had mixed views on soy's potential this cycle due to concerns about yields.
The South American country produced 21.8 million tonnes of corn last season and a record 47.6 million tonnes of soy. Argentina is the world's No. 2 corn exporter and the No. 3 soy supplier.
According to Ricardo Baccarin, analyst from Panagricola consulting firm, the growth in planting area could produce 23 or 24 million tonnes of corn.
Argentina's Agriculture Secretariat projects 2007/08 corn area of 4 million hectares, up from 3.58 million last season.
"The significant expansion in acreage will lead to greater production, even if we don't reach last year's yields," said Diego Bancalari Sola, an analyst at the Buenos Aires Grain Exchange.
Last season, corn yields exceeded 10 tonnes per hectare in the central growing region.
By last Thursday, Argentine farmers had seeded 64 percent of the corn area forecast by the government.
An official at the Argentine Rural Society's institute for economic studies said corn output will be pegged at 25 million tonnes to as much as 30 million tonnes depending on weather conditions.
The US Department of Agriculture (USDA) forecasts Argentina's 2007/08 corn crop at 22.5 million tonnes.
Analysts differ much more on outlooks for the soy crop.
Bancalari Sola said that while soy yields are expected to slip versus last season, greater acreage should compensate for that, leading to stable production.
Argentina is the world's largest supplier of soyoil and soymeal. The government expects soy area to expand to a record-large 16.5 million hectares, up from 16.15 million in the 2006/07 season.
Baccarin said he expects production to rise as a result.
"Many of the new soy areas were once ranching lands and they are expanding northward. With yields similar to those of the last three years, it is likely that the harvest will be around 50 million tonnes," he said.
Argentine farmers recently began planting 2007/08 soy, and they normally hit their stride in November.
However, an official from Ag Rural says there is still uncertainty regarding production as the increase in sowing area is not as big for soy and thus, no record yields are expected unlike last year where harvests came close to 3 tonnes per hectare.
The official sees soy harvest at 45 million tonnes but "everything will depend on whether there is sufficient rain."
The USDA forecasts Argentina's 2007/08 soy output at 47 million tonnes.