Argentine Crop Update
- The Rosario Grains Exchange (BCR) is projecting Argentina's wheat crop at 16.7 million tonnes, down slightly from 17 million tonnes previously.
- BCR estimates 600,000 hectares of 6.5 million hectares planted have been abandoned.
- The Buenos Aires Grain Exchange reported a similar forecast for wheat production at 16.8 million tonnes.
- The latest USDA forecast was for 18 million tonnes compared to 19.8 million last year.
- BCR noted production in the central province of Cordoba could realize its worst harvest in 20 years.
- Soybean planting is reported to be 20% complete out of the total 17.2 million hectares (42.5 million acres) estimated.
- 31% of the 6.3 million hectares (15.6 million acres) estimated for corn had been planted.
- The BCR estimated a harvest of 50 million tonnes for soybeans (USDA 51 million) and 48 million tonnes for corn (USDA 50 million).
FBN’s Take On What It Means: A drought since the middle of this year has caused major losses in wheat acreage in Argentina. Recent rains were too late to help the majority of the wheat. If the exchange forecast is realized, it would be the smallest wheat crop in five years. However, this will be offset by increased production from Australia. Planting of beans and corn is on pace with average and has been boosted by recent rains with more precip expected this weekend. The longer term forecast is for below average rains over the next two weeks, and the risk of adverse weather is likely to be supportive of prices.
Russia’s Export Quota Non-Impactful, Comments on Crop
- Reports indicate Russia has set an export limit of 15 million tonnes of grain starting February 15-June 30.
- Last year, the quota was set at 7 million tonnes from April-June.
- The limit has not altered our export outlook for Russia and is viewed as not impactful to the global wheat trade situation.
- Russia’s southern areas were dry this winter wheat planting season.
- The crop there is heading into dormancy but reports state that the initial stands are less than ideal in parts of southern Russia and Ukraine.
- At this juncture, we are not overly concerned about production prospects.
- Winterkill then spring weather will need to be watched closely.
- If the crop is treated well moving forward, we would expect normal production volumes out of that area.
FBN’s Take On What It Means: The export limit is not surprising but also is not likely to impact trade. Dry-weather concerns in Russia are premature in that we could have ideal conditions moving forward followed by normal production levels. Acreage there is expected to be higher versus last year.
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