The Rosario grains exchange cautioned of an “alarming” loss in Argentine wheat area, thanks to frost and drought which is in some the worst in at least 30 years, as it cut its harvest forecast to a seven-year low.
The exchange – warning of a “critical situation which could get worse” – said that an October 9 frost had prompted a “very strong cut” in yield hopes in the centre of the Argentine wheat belt.
“Each day that passes, evidence of damage becomes more evident,” it said, talking of yields as low as 1.5-2.0 tonnes per hectare in the region, compared with a national average of 3.50 tonnes per hectare last season.
The region has also suffered an “alarming increase in lost area” totalling 400,000 hectares written off over two weeks – a tally that “will continue to increase in the coming weeks” as further crop reports come in.
The frost had added to damage from dryness which has “deepened” in the top growing province of Buenos Aires.
“As of October 19, 63% of Buenos Aires has its lowest level of water reserves out of the last 30 years,” the exchange said.
However, it was for Cordoba, the second-ranked grower last season, that prospects looked worst out of major growing provinces, with a harvest forecast down by more than 60% year on year at 1.74m tonnes.
“In Córdoba, wheat is going through a disaster scenario,” and expected to show a yield “very far from approaching” the 3.6 tonnes per hectare achieved last season.
The exchange forecast Argentina’s overall 2022-23 wheat production at 15.0m tonnes – a downgrade of 1.5m tonnes from last month’s estimate, and a drop of 8.0m tonnes year on year.
Indeed, a result at that level would be the lowest since 2015-16 – reflecting a yield which, at 2.72 tonnes per hectare, would be the lowest in a decade.
Corn vs soybeans
It cautioned too of the potential for a downgrade to its forecast for Argentina’s corn sowings, given a slow planting pace by farmers in the face of the lack of rainfall, which is typical of periods showing a La Nina weather pattern.
“The sustained lack of water over the last 37 months in the Pampas region, and the effects of a third consecutive Niña that are already being felt on the lack of water at the beginning of spring, puts at risk the achievement of the current planting intentions,” the exchange said.
It has forecast sowings this year of 8.0m hectares, down from 8.64m hectares last season.
Farmers could switch some area to soybeans, which can be later seeded, although the exchange said it was now sticking with a sowings estimate of 17.0m hectares, up by 900,000 hectares year on year.