May 03, 2010
Argentine Farmers to Increase Wheat Acreage
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Argentine farmers have started to plant their 2010-11 wheat crop and if the soil moisture remains good throughout the wheat planting period (generally the months of May and June) this year's wheat acreage will easily surpass what was planted in 2009-10. Last year, Argentine farmers planted only 3.3 million hectares of wheat, which was the lowest level in more than a century. According to the Grain Exchange in Buenos Aires, the 2010-11 wheat acreage in Argentina might hit 4.2 million hectares, which would be 26% more than last year, but still 28% below the five-year average. This is just a preliminary estimate and the final planted acreage will depend on rainfall during the months of May and June. April was a relatively dry month in Argentina, so additional rainfall we be needed to insure adequate germination of the wheat. The record wheat acreage in Argentina was 7.4 million hectares planted in 1982-83.
Wheat acreage was extremely low last year for two main reasons. The principal reason was a lack of soil moisture to insure successful germination. In 2009, Argentina suffered under one of the worst droughts in recent memory. The drought severly affected the production of soybeans and corn and farmers were very reluctant to invest in planting wheat when the soils were bone-dry and the forecast held out little hope for additional rainfall. Additionally, the Argentine government had placed restrictions on wheat exports in order to insure an adequate supply for the domestic market. These export restrictions too limited farmer's desire to plant wheat because they did not know if the export restrictions would be lifted in time for them to potentially sell their wheat into the international market. Without having the export option, wheat prices would then be determined by the over-supplied domestic market.
This year, the soil moisture is much improved over 2009, but the rainfall has decreased during April especially in southwestern Buenos Aires and La Pampa and additional rainfall will be needed during May to insure germination. In many areas of southern Argentina, winter wheat is basically the only option for a winter crop. Other potential crops such as oats, barley, rye, and canola are all minor crops when compared to wheat.