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May 3, 2018

Wheat Production in South America could increase 5.9% in 2018

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

May is the primary month to start planting winter wheat in Argentina and the weather has started to improve just in time for planting. After enduring months of a severe drought, rainfall started to increase in April and it has continued into the opening days of May. Argentina is the largest wheat producer in South America followed by Brazil, Paraguay and Uruguay.

The improved rainfall in Argentina came generally too late to help the soybean and corn crops, but it has recharged more than 70% of the soil moisture as the wheat planting is set to get underway. In the core production areas, the soil moisture has been recharge, but there are still moisture deficits in southeastern Buenos Aires and in La Pampa provinces.

The Buenos Aires Grain Exchange is estimating that the wheat acreage in Argentina will increase 3.5% in 2018 if the weather cooperates, while some private estimates has it up as much as 10%. Last year, farmers in Argentina planted 5.7 million hectares of wheat according to the Grain Exchange and they estimate that the acreage may increase to 5.9 million hectares if there is adequate soil moisture for planting.

T&F Consultoria Agroeconomica estimated that the 2018 wheat production in Argentina will be at least 18 million tons if the weather cooperates. For the four principal countries combined, they estimate that the wheat production will increase 5.9% from 23.5 million tons last year to 24.9 million tons this year.

Brazil is the second largest wheat producer in South America and the states of Parana and Rio Grande do Sul produce more than 90% of Brazil's wheat. The wheat acreage in Parana is expected to increase due to a reduction in this year's safrinha corn acreage. The weather is currently very dry in Parana with very little rainfall in the forecast. Farmers in Parana would like to start planting their wheat in early May, but planting may have to be delayed until the state receives additional rainfall. In Rio Grande do Sul the wheat acreage is expected to increase 10% in 2018.

A small amount of wheat is produced in the center-west region of Brazil and the wheat acreage in that region is expected to increase 0.9%. Brazil's total wheat production in 2018 is expected to increase 26% to 5.3 million tons.

Farmers in Paraguay are expected to plant at least 428,000 hectares and production could total 1.0 million tons. The wheat acreage in Uruguay is expected to be unchanged with an estimated production of approximately 600,000 tons. It has been reported that wheat planting is already underway in parts of Uruguay.