Argentina appears poised for its best sunflower output in a
decade helped by the knock-on effect of wetness damage to wheat fields –
besides of the dryness depressing prospects for Ukraine's autumn-harvested
US Department of Agriculture officials - outlining the
reasoning behind an upgrade to 4.0m tonnes on Tuesday in their forecast for
Argentina's 2017-18 sunflower harvest - flagged the dent to world supply from
dryness in Ukraine, the world's top grower of the oilseed.
"For Ukraine, an extended dry spell in July and August has
lowered yield prospects for the 2017-18 sunflower seed crop," the USDA said.
The USDA cut by 500,000 tonnes to 14.0m tonnes its forecast
for the Ukraine sunflower seed harvest, while cutting by 1.0m tonnes to 27.5m
tonnes its estimate for production of corn which, as another autumn-harvested
crop, has also been hurt by the "unfavourably dry weather".
Separately, analysis group Lanworth on Wednesday trimmed its
forecast for Ukraine's corn harvest this year to 27.5m tonnes, citing "forecasted
hot and dry weather in the second part of September [which] will draw down
yields" in central areas.
Ukraine's woes have helped sunflower seed prices "hold
steady" in Argentina, while soybean prices have weakened", the USDA said.
Furthermore, Argentine farmers, now sowing their autumn-harvested crops, have been presented with
extra potential area to plant with sunflowers thanks to the loss of winter wheat area to floods.
"Some wheat area that was recently flooded in the Province
of Buenos Aires could be replanted with other crops, including sunflower seed."
Overnight, the Buenos Aires grains exchange cautioned that
flooding prompted by fresh inundations last weekend in Buenos Aires and La
Pampa provinces could see a further 70,000 hectares of wheat area lost, on top
of 80,000 hectares already written off.
A further 150,000 hectares of wheat was not planted at all thanks
to excess moisture, the exchange said.
Argentine farmers are now expected to sow 1.9m hectares with
sunflowers, the largest area in a decade.
And the extra output "bigger crop would let Argentine
processors increase the sunflowerseed crush, potentially replacing some of the
Ukraine sunflower oil exports unavailable to the global market".
Argentine sunflower oil exports will in 2017-18 hit a
six-year high of 625,000 tonnes, the USDA believes.