Post continues to project production for the 2014/15 wheat crop at 12.5 million tons, 500,000 tons more than the official USDA estimates. There is great disparity on wheat numbers among local contacts/sources, ranging from lows of 11.0 million tons, to highs of 13.3 million tons. In general, yields have been higher than average, but somewhat lower than farmers' earlier expectations due to late-season high temperatures in the center of the country and excess rain in southern Buenos Aires province, which in some cases, resulted in acreage losses. Depending on the source, these losses range between 130,000 and 260,000 hectares for the entire country. Post continues to estimate a final harvested area of 4.2 million hectares, 100,000 hectares higher than USDA. The quality of wheat is considered to be average, resulting barely over minimum levels of protein and hectoliter weight. Farmers are not happy with the economic results of this crop season as domestic prices have fallen significantly while production costs continued to increase, closely matching the country's high inflation. Apart from having a deduction in the price of wheat of 23 percent due to the export tax, producers are suffering the effects of the government's export constraints. The government continues to open small export tranches every now and then (so far, for the 2014/15 crop, it has authorized 2.6 million tons of wheat and 0.3 million tons of wheat flour – out of a potential export surplus of eight million tons based on Post's numbers). This situation allows local wheat mills to source their wheat with little competition from exporters. Farmers claim that due to this situation, they are collecting between US$40-60/ton less than what the price should be, based on parity with the Chicago market.

Post continues to estimate wheat exports for 2014/15 at 6.5 million tons, 500,000 higher than the official USDA estimates. There is great uncertainty of what the government policy will be and what farmers will do during this year. There are presidential elections at the end of the year and a change in status quo will occur due to constitutional term limits. The new government is set to take place in early December, and most analysts expect significant policy changes, which may facilitate an increase in exports. At present, traders expect Argentina to export to Brazil 4.5-5.0 million tons of wheat and roughly 700,000 tons of wheat flour during 2014/15.

Ending stocks for 2014/15 continue to be large, at almost 2.5 million tons, the equivalent of the use of five months domestic use. Stocks are mostly located in southern Buenos Aires province, the country's wheat belt

Wheat Argentina

2012/2013

2013/2014

2014/2015

Market Year Begin: Dec 2012

Market Year Begin: Dec 2013

Market Year Begin: Dec 2014

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

3,600

3,600

3,500

3,500

4,100

4,200

Beginning Stocks

734

734

286

286

2,556

2,646

Production

9,300

9,300

10,500

10,500

12,000

12,500

MY Imports

2

2

20

2

5

2

TY Imports

4

4

2

2

20

2

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

10,036

10,036

10,806

10,788

14,561

15,148

MY Exports

3,550

3,550

2,200

2,092

6,000

6,500

TY Exports

7,450

7,450

1,601

1,601

6,000

6,500

Feed and Residual

300

300

100

100

100

100

FSI Consumption

5,900

5,900

5,950

5,950

6,050

6,050

Total Consumption

6,200

6,200

6,050

6,050

6,150

6,150

Ending Stocks

286

286

2,556

2,646

2,411

2,498

Total Distribution

10,036

10,036

10,806

10,788

14,561

15,148

1000 HA, 1000 MT, MT/HA