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UPDATE 2-Argentina expects a 17 pct drop in wheat output
October 18, 2012 / 8:50 PM / in 5 years

UPDATE 2-Argentina expects a 17 pct drop in wheat output

* Government says farmers planted far less wheat this season
    * Corn area seen edging down to 4.97 million hectares

    By Hugh Bronstein
    BUENOS AIRES, Oct 18 (Reuters) - Argentina's upcoming wheat
harvest is expected to shrink 17 percent from last season, the
Agriculture Ministry said on Thursday, as farmers skirt
government export curbs by shifting to other crops.
    The forecast drop to 11.5 million tonnes is bad news for
consumer nations looking to Argentina to help make up for thin
supplies caused by droughts in bread basket producers such as
the United States, Russia and Australia.
    In its monthly crop report, the Argentine ministry stuck by
its view that 3.7 million hectares were sown with wheat in the
current crop year, down 20 percent from the 2011/12 season.
    Farmers have shied away from wheat to avoid export limits
that do not apply to Argentina's main agricultural export, soy,
which will start being planted this month and could be headed
for a record year.
    The country's 2012/13 corn area is seen at 4.97 million
hectares, down a touch from 5.00 million hectares in the
previous season. The government first revealed its area estimate
in a weekly crop report earlier this month. 
    Low global stocks have pushed benchmark Chicago wheat prices
33.4 percent higher this year while soybeans have jumped 28.2
percent and corn 16.6 percent. Argentina is a top world supplier
of all three crops at a time of rising global food demand.
    The flow of grains from Argentina is also of interest to
exporters such as Bunge Ltd and Noble Group Ltd
, which operate gigantic terminals along the Parana
River, leading to the shipping lanes of the South Atlantic.
    The Buenos Aires Grains Exchange forecasts 2012/13 wheat
production at 10.12 million tonnes, down 28 percent from last
season. The U.S. Department of Agriculture estimates Argentine
wheat output of 11.50 million tonnes this crop year.    
    Nearly a third of Argentina's 2012/13 corn area has been
planted so far, the monthly report said. "Growing conditions are
excellent except for areas with excess moisture, where the lack
of firm topsoil has slowed planting," it added.
    Also on Thursday the grains exchange said 2012/13 corn
sowing lags the previous season's tempo by 11 percentage points,
although progress of 6.9 percentage points was made over the
last week, the report said.
    But the storms that bogged down sowing earlier this week
gave way by Thursday to sunshine that is expected to last for
several days, helping farmers drain soaked fields and prepare
for soy plantings in the weeks ahead. 
    The grains exchange expects 3.4 million hectares of
commercial-use corn to be planted this season, more than one
million hectares of which is already in the ground.
    Some early-planted corn fields in low-lying parts of Entre
Rios and Buenos Aires province have been flooded, increasing the
risk of poor yields, the exchange report added.
    Argentina's 2012/13 wheat, which was planted earlier this
year and has started to be gathered in some regions, has largely
benefited from the wet weather, according to the exchange.
    "La Pampa and Cordoba provinces have enjoyed optimal
moisture conditions, raising the possibility of high yields," it
said, warning farmers to beware of moisture-related crop damage
that could be caused if the heavy showers continue.
    "Despite this risk, southeastern and southwestern Buenos
Aires province, where 40 percent of Argentina's wheat is
planted, have been spared any significant flood damage so far,"
the exchange said.

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