December 22, 2008

Argentina corn area seen falling more on drought


Hot, dry weather is slowing corn planting and will likely lead to a further reduction in planted area, the Buenos Aires Cereals Exchange said in its weekly crop report Friday (December 19).


So far, farmers have planted 89.8 percent of the area seen going to corn this season.


"The bulk of the pending planting is in the north, where day-by-day intentions to plant are decreasing for both weather and market reasons," the exchange said.


"While there is still time to plant some of the grain, the total area will suffer an additional reduction," the exchange said.


Argentina's corn planting will fall to 2.44 million hectares this season, according to the exchange's current forecast, down sharply from the 3.2 million hectares last season.


The dry weather and higher relative profitability expected with growing soy is spurring the shift.


The wheat harvest advanced rapidly this week due to the dry weather.


To date, 70 percent of the 2008-09 wheat harvest is complete, 15 percentage points ahead of the harvest pace a year ago.


Yields have averaged a dismal 1.74 tonnes a hectare so far, down 40 percent from the 2.93 tonnes a hectare seen last year, due to a severe drought throughout much of the growing season.


Final yields are expected to be below the 2.3 tonnes a hectare forecast last week, leading the exchange to predict a reduction in its production forecast of 9.7 million tonnes.


The Agriculture Secretariat lowered its forecast for wheat production to 9 million tonnes on Wednesday (December 17).


On the other hand, soy planting progressed slowly over the last week due to the dry weather.


Insufficient rainfall is beginning to stress the young plants. Warm, dry weather is expected to continue next week, with increased rainfall providing some relief after the Christmas, the exchange said.


So far, farmers have planted 76 percent of the record 18.2 million hectares seen going to soy this season, according to the exchange.


Sunseed planting is complete, with farmers planting 2.12 million hectares, according to the exchange.


The dry weather prevented some of the late planting, causing the exchange to lower its area forecast by 40,000 hectares from last week. Area is down 21 percent from last season, according to the exchange.

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