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June 23, 2017

Wheat Planting in South America produces Mixed Results

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

As the corn and soybean harvests in southern South America near completion, many farmers are now focused on planting their winter wheat. The early planting has produced mixed results and generally the 2017 South American wheat crop is expected to be smaller than last year.

The first area to plant wheat in South America is the state of Parana in southern Brazil. According to the consulting agency Trigo & Farinhas, farmers in Parana started planting their wheat in May and they have now planted 86% of their intended wheat acreage. The wheat crop in Parana is rated over 90% in good to excellent condition. The crop is 13% germinating, 83% in vegetative development, and 4% flowering. The biggest risk for the crop going forward is the possibility of freezing temperatures, especially during flowering.

The Department of Rural Economics in Parana (Deral) is expecting the state to produce 3.1 million tons of wheat or 11% less than last year. The USDA is projecting the 2017 wheat production in Brazil at 5.6 million tons or down 17% compared to last year due to lower acreage and yields. In 2016, Brazil produced 6.7 million tons of wheat. Brazil only produced about half of its wheat needs and Brazilian wheat imports are expected to increase this year to 6.9 million tons.

Farmers in Argentina are currently in the process of planting their winter wheat, but persistent wet weather over the last several weeks has delayed the wheat planting in parts of Argentina. The Stock Exchange in Rosario estimates that the wheat acreage in the core production region will decline 10% due to the wet weather that has impacted the region.

In areas of northern Buenos Aires province, where there has been a series of flooding episodes over the last six months, the wheat planting is approximately 30% complete, whereas in areas outside the flooded zone, the wheat planting is approaching 80% complete.

The Stock Exchange of Santa Fe reported that in the central and northern areas of Santa Fe, farmers have planted 75% of their intended wheat crop. In contrast, the Grain Exchange of Entre Rios reported that farmers have planted only 7% of their intended wheat acreage in their province due to excessive moisture during the month of May. Unfortunately for farmers in Entre Rios, the ideal planting window for wheat has now passed.

Cominagro estimates that the 2016/17 wheat acreage in Argentina will decline 5.7% to 6.0 million hectares. The USDA is currently estimating the Argentine wheat acreage even lower at 5.6 million hectares.