Argentine wheat production for 2016/17 is projected at 13.7m Mt, 1.3 MMT lower than the official US Department of Agriculture (USDA) numbers, according to GAINS report author, Ken Joseph.
He noted this is a direct consequence of a lower harvested area. The wheat crop has been hit by the wet conditions, as only about 80% of it is planted with the sowing window in the northern part of the country almost at an end, noted the report. Producers in the southern part of the Buenos Aires province do have several weeks remaining though.
“The unusually wet conditions during autumn and early winter in the main wheat production areas of the central part of the country, due to El Nino weather pattern, complicated and limited the sowing of winter crops. Parts of Entre Rios, Santa Fe and Cordoba provinces have suffered unusually excessive rains, high moisture and very cloudy days during April-July which have shut down part of the road network (many dirt roads) and have worsened the problem of high water table levels in many areas,” noted Joseph. “Meanwhile, the country’s key wheat area, the center and south of Buenos Aires province, has also been suffering unusually wet weather from May to date.”
He reported the harvest of soybeans and corn in this area is also delayed due to logistical problems caused by muddy roads and wet fields that cannot be harvested yet.
"It will all depend on the weather in the next two to three weeks," added Joseph.
Barley production for 2016/17 is forecast at 3m Mt, 400,000 tons lower than the figure initally set by the USDA, also as a result of weather limitations.
Corn projections for 2016/17 remain practically unchanged, except that the author forecast a larger harvested area but a lower average yield than the official USDA predictions.
The author said that more of the country's farmers are planting corn though: “President Macri’s policy changes in December 2015 have made corn returns very attractive. The new situation encourages farmers to incorporate corn into their farm’s crop rotation scheme, which in the past several years had shifted strongly towards soybean production.”
The last two corn crops in Argentina, continued the report, have benefited from excellent wet weather which helped yields reach record highs. Now weather forecasters are debating whether the upcoming summer will be neutral or if La Nina will have any effect. "La Nina in Argentina’s most productive region is usually dry. As the planting season approaches (September for early corn in the corn belt), producers will define, based on weather forecasts, if they plant early or late corn to skip the flowering stage in hot, dry January. With normal weather, early corn yields are significantly higher than late corn. However, corn planted in December has shown to be very stable."
Sorghum production for 2016/17 is forecast at 3.4 MMT, 500,000 tons lower than USDA as the GAINS report predicted a smaller harvested area. Sorghum will face a lot of competition from other crops and the export demand is expected to remain slow, wrote the author. Rice production and harvested area for 2016/17 are expected to be slightly smaller than the amount originally forecast by the USDA.
Anticipated exports for corn in 2016/17 remain at 23m Mt and sales for 2015/16 also are expected to stay at 19m Mt reported Joseph. But the export window starts to slow in August.
Expectations of wheat exports for 2016/17 have been lowered to 7.5m Mt from the originally estimated 9m metric tons, he noted. “The Brazilian market continues to be seen as the priority, with local traders estimating shipments between 4-5 MMT of wheat,” he added.
Wheat exports for 2015/16 are predicted to be 8.1m Mt, about 700,000 Mt below the USDA’s initial estimate.
Sorghum exports have been decreased for 2016/17 from 1.3m Mt to 900,000 tons, wrote Joseph. The decline, he said, stems from reduced production and slow export demand.
Price for the barley crop has been unattractive based on available volume and poor international interest, with exports for 2015/16 estimated to be below what was previously predicted. However, predicted exports for 2016/17 have remained at 1.9m Mt.