November 23, 2012
Argentina's soy prices increase this week on signs that record crops expected from Argentina and Brazil this season might not meet expectations.
The country is the world's third-largest soy exporter behind Brazil and the US and is the leader in global exports of soymeal and soyoil.
Planting has been delayed due to heavy showers over the past two months, cutting into the optimism for a bumper crop.
To date, 36.6% of the fields expected to go to soy have been planted, down 9.7 percentage points on the year, according to the Buenos Aires Cereals Exchange.
Argentina's soy area in the 2012-13 season is likely to reach a record 19.36 million hectares, up from 18.67 million hectares last season, according to the Agriculture Ministry.
The USDA is expecting Argentina to grow a record 55 million tonnes of soy this season, beating the record of 52.7 million tonnes set during the 2009-10 season. However, earlier in the season, many analysts had expected production to climb even higher.
Meanwhile, May 2013 corn contracts sold for US$205 a tonne at the Rosario exchange, up from US$200 a tonne a week earlier.
The wet conditions have also slowed corn planting, although conditions are improving.
So far, 50% of the 3.4 million hectares expected to go to corn this season have been planted, down 12 percentage points on the year, according to the Buenos Aires exchange.
Early on, expectations had been for a record 28 million tonnes of 2012-13 corn production, but output is now likely to be 26 million to 27 million tonnes because of the planting delay, according to the corn growers association Maizar.
That would still top Argentina's previous corn record of 24 million tonnes during the 2010-11 season and is up sharply from the 21 million tonnes harvested during the drought-ravaged 2011-12 season.
December 2012 wheat sold for US$230 a tonne in Rosario, up from US$225 a week ago.
To date, 18.9% of the winter wheat harvest is complete, with production forecast at 10.12 tonnes, according to the Buenos Aires exchange. That is down sharply from the 13.2 million tonnes the government estimates was grown last season.