ARGENTINA – The grain industry in Argentina has reported a bag of mixed fortunes with a failing wheat crop threatening to overshadow the spectacular gains that the government has made in soybean sales.
According to a US Department of Agriculture (USDA) Foreign Agricultural Service (FAS) report, soybean sales in Argentina reached a record 13.7 million metric tons in September largely driven by a government offered special exchange rate for producers.
The record sales were to the joy of exporters who booked nearly 4m Mt in export declarations, with China as the top destination.
Due to this change in government policy and resulting sales, the USDA FAS team has raised its MY2021/22 export forecast to 5.5m Mt, which is 3.25m Mt higher than official USDA figure.
The rise in Soybean exports is vital for Argentina as the grain and its byproducts, soybean meal and oil account for more than half of Argentina’s exports.
In recent years, these have accounted for almost two-thirds, making the largest single source of foreign currency for Argentina’s Central Bank (BCRA), noted the FAS publication.
Wheat harvest- the worst in seven years
Wheat farmers are, however, not having a good time as their soybean peers with week by week forecasts of the country’s 2022/23 crop dropping due to worsening weather conditions.
The Rosario grains exchange recently cut its 2022/23 harvest forecast to 15 million tons, down from the 16 million tons estimated last week.
The anticipated wheat harvest, which would make this year the worst in seven years, suffered again this week when it was hit by a late frost during the 8th and 9th of this month, while 19.4% of the fields were between flowering and grain filling.
Reported damage includes yellowing of the ears, interruption of grain filling, and abandonment of frames, resulting in losses of up to 50%, with both nuclei being the most affected regions.
Argentina produced a record 23 million tons of wheat in the last growing season. Still, analysts at the Rosario grains exchange believe that next year’s wheat harvest, “is in a very critical situation, and could get worse”.
However, the Rosario exchange maintained its projections for the 2022/23 corn harvest at 56 million tons and its 2022/23 soybean harvest at 48 million tons.
The exchange said that due to the drought, farmers may opt to plant more land in soybeans, a hardier crop than corn, estimating that the planting area for the oilseed could reach 17 million hectares.