Argentina backed ideas of a sharp drop in corn sowings, despite foreseeing a late-year rush in planting, as it cautioned over quality in early-harvested wheat.
The country’s farm ministry, in its first estimate for domestic corn sowings for 2015-16, pegged plantings at 5.30m hectares, down 700,000 hectares year on year.
The drop in sowings to what would be a four-year low will be led by a decline in corn aimed at “commercial” use, rather than for silage or livestock consumption, the ministry said.
It also said that sowings had so far enjoyed “good” soil moisture conditions, but unfavourable temperatures.
While the ministry stopped short of commenting on the reasons behind its forecast for weaker sowings, the estimate tallies with broader expectations of sowings being discouraged by knock-on effects of Argentina’s tough export regime, which feeds through into lower prices for farmers.
Fast finish to 2015?
Indeed, Michael Cordonnier, the respected corn and soybean analyst, has forecast a 12.5% drop in plantings.
And earlier this month, US Department of Agriculture officials in Buenos Aires cautioned that for 2015-16, “contacts expect total wheat and corn area to decline by 1.5m hectares”.
The officials flagged “various economic constraints” including export taxes, besides “concerns” over delays to government issuance of licences for grain shipments, a factor which also affects farmers’ prospects.
The USDA officials also highlighted “significant uncertainty on planting decisions” stemming from the first round of Brazil’s presidential elections, on Sunday, with many growers believed to be deferring sowings until the outcome of the poll is clear, and the likelihood of policy changes assessed.
A change of government could bring a strong switch to the grain, as Agrimoney.com reported on Wednesday.
Argentina’s farm ministry, without giving its reasoning, forecast that the rate of plantings would “decelerate, to increase again towards the end of the year”, with the sowing season viewed as proving “late”.
Separately, the ministry nudged higher by 100,000 hectares to 4.1m hectares its forecast for wheat plantings for the 2015 harvest, which has just started in the north of the country.
The crop had overall developed without problems, although the ministry did highlight that wet conditions had encouraged the spread of diseases such as rust.
“In areas where low temperatures were recorded, some developmental delay is noticed.”
The ministry also said that results from early harvest in northern Santa Fe, had shown “acceptable” yields, but “low” milling specifications.
The progress of Argentina’s crop is being particularly closed watched by buyers in Brazil, a structural wheat importer, which typically relies on its neighbour for the bulk of its bought-in supplies.
A poor quality Argentine crop would likely send Brazilian importers to North America for alternative supplies.
(Source – http://www.agrimoney.com/news/argentina-sees-steep-drop-in-corn-area-flags-wheat-concern–8928.html)