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 crops.
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.
By Mike Verdin