Argentina Wheat: Quality Issues Are Being Recorded
Talk to our team about AgFlow's offering →
Reading time: 2 minutes
Argentine Wheat production in marketing year (MY) 2023/24 is forecast at 17.0 million metric tons (MMT), 500,000 MT lower than the official USDA estimate, as Post lowers its area estimate to 5.6 million hectares (HA). Because of a continued dry environment in many parts of the country, the planted area will be approximately 1 million hectares lower than initially projected. Despite some recent rains that helped farmers sow Wheat before the planting window closed, many fields in Cordoba and the northwest and southwest province of Buenos Aires will remain fallow over winter because of continued dryness.
The south of the province of Buenos Aires is suffering excess moisture, and planting is delayed. Additionally, as the planting season has progressed, Wheat’s economic margins have deteriorated due to a steady decline in futures prices. Because of this, some farmers with sufficient soil moisture decided to pass on planting to focus on planting early summer crops in a few more months.
Planting is estimated to be over 80 percent complete at a national level. While conditions vary, farmers generally invest less money in inputs thanks to poor weather at planting, expected lower returns due to lower prices, and farmers’ weaker financial conditions after a very bad MY 2022/23. However, wetter conditions from July onwards could help offset yield losses linked to fewer inputs.
MY 2022/23 harvested area is estimated downward, and its total Wheat production estimate is lowered to 12 million tons. Some brokers believe production was even lower and say that it is currently challenging to source Wheat. Quality issues have been reported in Wheat harvested in southeastern Buenos Aires province, and industry sources say that some of it will likely be held until it can be blended into new crop Wheat.
According to AgFlow data, Argentina exported 0.25 million tons of Wheat to Brazil in July 2023. Wheat exports in MY 2023/24 are projected at 12 million tons, a significant recovery from the low 4.6 million tons projected for MY 2022/23. In late 2022 and early 2023, the government, to take pressure off prices in the domestic market, extended the window for exporters to comply with the export declarations (DJVEs).
The extension was granted for 360 days for DJVEs approved to be shipped between December 1, 2022, and July 31, 2023. DJVE for the MY 2022/23 crop totals 8.9 MMT to date, but most brokers believe only 4.0 MMT will ultimately be shipping, with the rest being rolled forward for Wheat produced in the coming crop season. Roughly 600,000 tons of exports of Wheat flour and other products, in the equivalent of Wheat, are expected to be shipped through November 2023.
Barley Output and Export in Argentina
Post continues to estimate production for MY 2023/24 at 4.5 million tons, 800,000 tons lower than the official USDA estimate, which estimates the area at 1.4 million hectares, 200,000 hectares higher than Post. Recently, there has been a late shift in some areas from Barley to Wheat, especially in the southeast of Buenos Aires province, the country’s main Barley region. Farmers in this area noted that their expected Wheat returns were far better than those of Barley (when averaging malting and feed Barley prices). Post’s production and area estimates, based on interviews with local market participants, are also smaller than the official USDA estimate for MY 2022/23.
Exports in MY 2023/24 are forecast at 2.6 million tons, significantly lower than USDA because of the smaller output projected by Post in MY 2023/24. Contacts estimate that 1.1 million tons will be of malting Barley focused primarily on the South American region, and the remainder will be feed Barley.
Try AgFlow Free
Access Free On Updates for Corn, Wheat, Soybean,
Barley, and Sunflower Oil.
No Credit Card Required & Unlimited Access In Time