The U.S. ag attache in Argentina has lowed its 2013-14 wheat production estimate to 10.5 MMT, which is 1.5 MMT below USDA's current estimate. It also lowered its corn production estimate to 24 MMT, 2 MMT below USDA. The attache says wheat exports have been reduced to 4.2 MMT and corn exports have been reduced to 16 MMT.
The attache says dry weather in the central and northern part of the country has negatively impacted the wheat crop. "The northwestern part of the country has gone through a two-year long drought, with lower planted area than earlier planned. In the northeastern part of the country it has not been much better," state the attache. "In Cordoba and Santa Fe provinces it was also dry, with the addition of very cold weather late in the season. Yields will be low and several fields were lost."
Due to the reduction in the size of the wheat crop, the attache says exports have been revised lower to 1.8 MMT below USDA's current estimate. "However, the total volume will depend on how much the government finally allows to be shipped. After a very tight supply in season 2012-13, we expect the government to manage exports in a conservative way and finish the crop season with larger stocks so as not to go through again a very stressful end of season."
The attache says the lower corn production estimate is due to lower planted area, drier-than-normal weather and a shift from earlier planted corn to later-season plantings. "Profitability is very slim, and production costs (compared to) soybeans are much higher," states the report. " Lower world corn prices, increased productions costs (Argentina had 25% inflation in the past year and a similar level is expected for the coming year), high export taxes, an overvalued local currency and low soil moisture all play against a greater planted area. A very dry winter and, so far spring, has affected early season corn planting which normally ends by mid-October. Most of the fields which were not sown will pass on to late corn planting but some will shift directly to soybeans."