Linked In
News In
Linked In

You are viewing 1 of your 2 complimentary articles.

Register now to receive full access.

Already registered?

Login | Join us now

Argentine crop woes in focus as crop report looms

Twitter Linkedin

Crop setbacks in Argentina grabbed the spotlight as agricultural commodity investors prepared for a US report in which South American harvest estimates are expected to prove potential market movers.

Cargill's AWB crop handling division cautioned that the heavy rains which are dogging Argentina's barley and wheat harvests, besides corn and soybean plantings, are "impacting their barley quality", contributing to "tight" world supplies of the grain.

Separately, Swiss-based malting barley consultancy RMI Analytics cautioned that while barley in parts of Buenos Aires province looked "promising", that harvested around Rosario in Santa Fe shows poor yields and quality results which struggle to make malting grade.

"Occasionally the barley cannot even be used as feed barley for exports as screenings are that poor."

'Causing havoc'

The comments come amid mounting speculation that Argentina has cut to 4.5m tonnes, from 6m tonnes, quotas on wheat exports following rain damage to the crop – rumours that were given momentum by reports that several wheat vessels had not been allowed to sail last week.


Wasde corn stocks numbers, and (change on current figure)

World: 118.0m tonnes, (+16,000 tonnes)

US: 663m bushels, (+16m bushels)

Source: ThomsonReuters, USDA

The rain "is damaging wheat crops yet to ripen, delaying harvesting those which are ripe and causing havoc with the logistics operation to get the grain to the ports", traders at a major European commodities house said.

"In many areas the roads are too flooded to allow trucks to operate."

'Extreme wetness'

Argentine farm officials forecast the domestic wheat crop at 11.1m tonnes, down from some 15.5m tonnes last season, a decline fuelled by a drop of sowings this year in favour of barley.


Wasde soy stocks numbers, and (change on current figure)

World: 59.41m tonnes, (-611,000 tonnes)

US: 130m bushels, (-10m bushels)

Source: ThomsonReuters, USDA

Argentina is also seen as likely to see revisions in row crops too, thanks to the rains, with a cut to production of corn, which is earlier sown than soybeans, seen especially likely.

"Given the extreme wetness in the major Argentine growing areas, which is significantly delaying planting, many in the trade have lowered their estimate of Argentine corn production to 24.0m-27.0m tonnes, versus the USDA's estimate of 28.0m tonnes, which appears optimistic," Dan Cekander, director of grain market analysis at broker Newedge USA said.

At Macquarie, Chris Gadd, while forecasting no revisions by the USDA to most South America row crop estimates, said that "the only change that that may make is to lower their forecast for the Argentine corn crop".

About demand

Indeed, the December Wasde report is not expected to see too many revisions, with the USDA not until January set to revisit the domestic crop production numbers many investors still have under the microscope.


Wasde wheat stocks data, (change on current figure)

World: 173.44m tonnes, (-583,000 tonnes)

US: 712m bushels, (+8m bushels)

Source: ThomsonReuters, USDA

Instead, "this briefing will be more about demand", Don Roose, president of US Commodities said, with the Wasde expected to nudge lower estimates for US corn and wheat exports, and raise forecasts for year-end inventories.

For soybeans, the forecast for stocks at the close of 2012-13 is seen being downgraded, thanks to the strong pace of shipments so far in the season.


Twitter Linkedin
Related Stories

Evening markets: palm oil tumble blows cloud over rapeseed, canola market

Palm oil futures defy the rule that ag prices don’t move much on days when US markets are closed. White sugar futures gain

China's sugar import surge poses a few questions

Such as where the country will get its sweeteners from when import permits run out. And can it achieve a win-win situation?

Cotton top soft commodities bet for 2018, sugar the worst - Rabobank

Still, even sugar looks poised for price gains, as Brazilian output falls, the bank says. Cocoa, coffee outlooks score as reasonably bullish

IGC raises world grain output hopes again, citing US corn

And extra demand will only swallow part of the upgrade, meaning extra inventories, the International Grains Council
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

© 2017 and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of the Briefing Media group
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069