November 9, 2007

Argentina 2007/08 soy crop seen at 47.5 million tonnes; corn at 24.5 million tonnes

Soy production in Argentina for the 2007/08 campaign will reach 47.5 million tonnes, according to a US Department of Agriculture attache report posted Wednesday (November 7) on the Foreign Agricultural Services Web site.

Soy planting recently started for the 2007/08 campaign. Post expects that planted area will increase by more than 5 percent over the previous year's crop and maintains its forecasts for planted area at 17 million hectares for the 2007/08 crop year. Post estimates that production for the 2007/08 campaign will reach 47.5 million tonnes.

It is likely that more than 60 percent of the projected increase in area planted to soy will take place in the northern provinces of Santa Fe, Chaco, and Santiago del Estero. Those northern lands are generally less fertile than the provinces where soy are traditionally grown and will likely have a negative impact on overall yields. Also, much pasture land previously used for cattle production in Buenos Aires, Entre Rios, and La Pampa is being converted for soy production, which is also making room for the increase in planted area. Those converted pasture lands in the humid pampas provinces are very fertile and will likely dampen slightly the overall yield losses expected from the northern areas now coming into production. Post expects that overall yields will be slightly lower than last year's crop due to the increase in production on those marginal lands in the north.

On the other hand, harvested area for corn will reach 3.2 million hectares for the 2007/08 campaign, with overall production reaching 24.5 million tonnes, an increase of 9 percent over the previous estimate, according to a US Department of Agriculture attache report posted Wednesday on the Foreign Agricultural Services Web site.

Post expects that harvested area will increase in marketing year (MY) 2007/08 by around 6 percent over the current USDA estimate to total 3.2 million hectares. However, it is unlikely that yields will reach levels attained in 2006/07 due to expectations that some of the production area will suffer from limited rains during the growing season due to effects of La Niña. Assuming an average for yields at around 7.6 tonnes per hectare, post estimates that production will reach 24.5 million tonnes.

Corn planting has progressed at a very quick pace this year, due mainly to very good soil moisture and favourable weather conditions. As of October 25, the Secretariat of Agriculture reported that planted area had reached 64 percent (2.6 million hectares) of its estimated 4 million hectares for the 2007/08 crop. The crop is developing nicely in Cordoba and Buenos Aires with reports that the first plantings have reached a height of 15 centimetres in northern Buenos Aires.

As of late September, wheat planting was completed. Post estimates total harvested area will reach 5.2 million hectares for the marketing year (MY) 2007/08 campaign. Total production is forecast at 14.7 million tonnes based on expected yield increases over last year.

The overall crop condition is excellent. Rains throughout the major producing areas in the last few weeks, combined with high temperatures will likely produce higher yields than were seen last year. Farmers treated many plots with fungicides to prevent damage and the sun has recently started to shine for longer periods reducing the risk of disease. The Argentine Grain Exchange reports that the best wheat zones show similar to better conditions than last year and around 74 percent of the wheat surface is characterized as good to excellent. Southern Buenos Aires province is showing similar to better conditions than last year, while Cordoba is showing much better conditions than the previous campaign. Cordoba and La Pampa have seen an increase in area planted and are expecting higher yields with some areas projecting 70 to 120 percent yield increases over last year.