Highlights

Argentine wheat production for 2016/17 is projected at 13.7 million metric tons (MMT), 1.3 MMT lower than USDA. This is a direct consequence of a lower harvested area due to weather problems. Exports are adjusted down accordingly. Barley production for 2016/17 is forecast at 3.0 MMT, 400,000 tons lower than USDA, also as a result of weather limitations. Corn projections for 2016/17 remain practically unchanged, except that Post projects a arger harvested area but a lower average yield than USDA. Sorghum production for 2016/17 is forecast at 3.4 MMT, 500,000 tons lower than USDA as Post projects a smaller harvested area. Sorghum will face a lot of competition from other crops and the export demand is expected to remain slow. Rice production and harvested area for 2016/17 are expected to be slightly smaller than what USDA forecasts.

Wheat

Post projects Argentine wheat production for 2016/17 at 13.7 million metric tons (MMT), 1.3 MMT lower than USDA's official number. The main reason for such a difference is Post's lower projected harvested area, which is now estimated at 4.6 million hectares, 400,000 hectares lower than USDA. The unusually wet conditions during autumn and early winter in the main wheat production areas of the central part of the country, due to El Nino weather pattern, complicated and limited the sowing of winter crops. Parts of Entre Rios, Santa Fe and Cordoba provinces have suffered unusually excessive rains, high moisture and very cloudy days during April-July which have shut down part of the road network (many dirt roads) and have worsened the problem of high water table levels in many areas. Meanwhile, the country's key wheat area, the center and south of Buenos Aires province, has also been suffering unusually wet weather from May to date. The harvest of soybeans and corn in this area is very delayed due to logistical problems caused by muddy roads and wet fields that cannot be harvested yet. Private sources indicate that approximately 80 percent of the country's wheat has been planted to date. In the northern area, the planting window is practically over, while in the southern part of Buenos Aires province producers still have time until mid-August, but it will all depend on the weather of the next 2-3 weeks. In this area, some farmers are starting to evaluate whether to skip planting winter crops and plant directly soybeans or corn. Despite serious problems at harvest, yields of summer crops in most of this area have been and remain very good. Therefore, the final planted area could even suffer an additional cut. For crop 2014/15 post sets harvested area at 4.6 million hectares and production at 12.7 MMT, both lower than USDA, based on information provided by several private industry contacts. This difference also explains the 1.3 MMT lower ending stocks that Post carries into crop 2015/16.

Exports in 2016/17 are forecast at 7.5 MMT, lower than the 9.0 MMT estimated by USDA. This is primarily explained by the difference of production forecast between Post and USDA. The Brazilian market continues to be seen as the priority, with local traders estimating shipments between 4-5 MMT of wheat and an additional volume of wheat flour. The production of good quality wheat will be essential to supply this market. The balance will be shipped to many other markets around the world. Wheat exports for 2015/16 are estimated at 8.1 MMT, 700,000 metric tons lower than USDA. Post estimates that some 7.5 MMT of wheat will be shipped by the end of November 2016 (exports from December 2015-July 2016 will total approximately 6.5 MMT) and wheat flour for the equivalent of 600,000 MT of wheat. Local traders and the government are vigilant that the domestic industry does not run short of wheat supplies. In June 2016, an Argentine flour mill imported 290 tons of wheat from neighboring Uruguay to analyze its quality and see the feasibility of importing larger volumes. Argentina's 2015/16 season resulted in good yields but poor quality as most of the crop had low protein. Contacts believe that there will not be significant imports of wheat.

Post projects domestic wheat consumption for 2016/17 at 6.2 MMT, 100,000 tons lower than USDA, and for 2015/16 at 5.8 MMT, 350,000 tons lower than the official number. The local economy is going through serious economic adjustments, such as strong reduction of energy subsidies, and a continued high inflation which are significantly harming consumption. Industry contacts indicate that wheat flour mills have reduced the volume they process as sales are slow. However, most economists project a rebound of the economy during 2017 which would result in a stronger demand.

Barley

Argentine barley production for 2016/17 is forecast at 3.0 MMT, 400,000 tons lower than USDA. The main reason for such a difference is that Post now estimates a harvested area of 800,000 hectares, 100,000 hectares lower than USDA. As for wheat, a very wet autumn and early winter in central and southern Buenos Aires province are limiting plantings. Some contacts are doubtful that the estimated area will be fully covered, estimating a total area closer to 700,000 hectares at the most. In addition, the abundant volume of barley in the country (in hands of traders, malting plants, and producers) and weak international demand has made buyers offer growers contracts that are not very price attractive. Furthermore, now that wheat can be sold and exported freely, many producers prefer to reduce or completely drop barley production as it is commercially more complicated to meet minimum quality standards to capture higher prices. Post estimates a total harvested area for 2015/16 at 1.1 million hectares with a total production of 4.8 MMT, both lower than USDA's official number.

Despite a smaller production volume than what's projected by USDA, barley exports for 2016/17 remain the same at 1.9 MMT, as result of a higher carry in and a lower carry out compared to USDA for the marketing season. Exports for 2015/16 are expected at 2.8 MMT, 200,000 tons lower than USDA. Local traders estimate that Argentina, through November 2016, will export 1.9 MMT of feed barley (1.8 MMT have already been shipped or compromised), and 900,000 tons of malting barley, which is the typical volume which Argentina ships to South American countries. Domestic consumption of barley for the industry in 2015/16 is expected at 1.2 MMT, 100,000 tons lower than USDA. The local production of malt for export to Brazil is slowing down somewhat as beer consumption in that country has weakened.

Corn

The local agricultural sector continues to be very optimistic about the 2016/17 corn crop. President Macri's policy changes in December 2015 have made corn returns very attractive. The new situation encourages farmers to incorporate corn into their farm's crop rotation scheme, which in the past several years had shifted strongly towards soybean production. Post projects planted area to increase 1.0 million hectares, 300,000 hectares more than USDA. There are some players who estimate even a larger expansion. Despite a larger area than USDA, Post projects total corn production at 34 MMT, the same as USDA. The difference is that Post estimates a lower average yield, at 7.55 tons per hectare. Producers are expected to use high technology in their crops, especially greater volumes of fertilizers which are significantly less expensive than in the past several years. The last two corn crops in Argentina have benefited from excellent wet weather which helped yields reach record highs. Weather forecasters are debating on whether the upcoming summer will be neutral or if La Nina will have any effect. La Nina in Argentina's most productive region is usually dry. As the planting season approaches (September for early corn in the corn belt), producers will define, based on weather forecasts, if they plant early or late corn to skip the flowering stage in hot, dry January. With normal weather, early corn yields are significantly higher than late corn. However, corn planted in December has shown to be very stable.

Corn exports for 2016/17 are left unchanged at 23.0 MMT. Shipments for 2015/16 are also maintained with no change at 19.0 MMT. Local traders estimate that exports during March-June 2016 totaled 7.9 MMT, July could total 2.5 MMT, following August with 3.0 MMT, September 1.7 MMT and October with 1.3 MMT. Argentina's export window begins to end in August when Brazil's production comes in, followed by the United States.

Sorghum

Production for 2016/17 is projected at 3.4 MMT, 500,000 tons lower than USDA. Post also projects harvested area at 750,000 hectares, 100,000 hectares lower than USDA. Although sorghum could grow in some areas, it will face competition from higher planted areas for sunflower and corn. Sorghum has a lot of problems with bird damage which diminish yields significantly. It also faces competition from low technology corn (producers plant the seed they harvested the previous year), which gives producers the ability to consume it as forage or harvest it for use or sell. Apart from this, sorghum prices are lately valued at 80 percent of corn. The fact that there is little export demand also sets a limit to area expansion.

Post forecasts sorghum exports for 2016/17 at 900,000 tons, lower than USDA's 1.3 MMT. This is explained primarily because of a projected smaller production. Local traders indicate that there is little demand for export. Shipments during March-July 2016 will total approximately 120,000 tons.

Rice

Production in 2016/17 is forecast at 920,000 tons (milled basis), 80,000 tons lower than USDA. This is primarily due to Post projecting a lower harvested area of 208,000 hectares, 12,000 hectares lower than USDA. Although rice prices paid to farmers have increased lately as Brazil is demanding higher volumes after its production losses, local producers are quite discouraged with this crop. The El Nino weather pattern caused the breaking of several water ponds which many producers are not expected to fix, especially in central-northern Entre Rios province. Producers in this province have other production alternatives which are more profitable, such as corn or soybeans. In Corrientes province, area is expected to remain unchanged or drop marginally as several thousand hectares which last year were not sown because of El Nino and the risk of large river flooding, would come back into production. Production for 2015/16 is now estimated at 819,000 tons, lower than USDA's 891,000 tons. Rainy and cloudy weather have had a negative impact on average yields, which totaled 6.4 tons per hectare in Corrientes and 6.8 tons per hectare in Entre Rios.

Exports for 2016/17 are forecast at 550,000 tons, 50,000 tons lower than USDA. Industry contacts indicate that there is a lot of rice in Argentina and that exports are relatively slow. However, exports in 2015/16 have reacted lately due to Brazil's shortage. However, this situation would probably not repeat itself the following year.

Statistical Tables

Wheat

2014/2015

2015/2016

2016/2017

Market Begin Year

Dec 2014

May 2015

Dec 2016

Argentina

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

4960

4600

3765

3765

5000

4600

Beginning Stocks

2490

2490

4874

3574

1229

1004

Production

14000

12700

11300

11300

15000

13700

MY Imports

35

35

5

30

5

30

TY Imports

35

35

5

30

5

30

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

16525

15225

16179

14904

16234

14734

MY Exports

5301

5301

8800

8100

9000

7500

TY Exports

4200

4200

8600

8000

9000

7500

Feed and Residual

300

300

100

100

100

100

FSI Consumption

6050

6050

6050

5700

6200

6100

Total Consumption

6350

6350

6150

5800

6300

6200

Ending Stocks

4874

3574

1229

1004

934

1034

Total Distribution

16525

15225

16179

14904

16234

14734

Barley

2014/2015

2015/2016

2016/2017

Market Begin Year

Dec 2014

Dec 2015

Dec 2016

Argentina

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

900

900

1225

1100

900

800

Beginning Stocks

492

492

340

340

540

740

Production

2900

2900

4900

4800

3400

3000

MY Imports

0

0

0

0

0

0

TY Imports

0

0

0

0

0

0

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

3392

3392

5240

5140

3940

3740

MY Exports

1552

1552

3000

2800

1900

1900

TY Exports

1599

1599

2900

2700

2000

2000

Feed and Residual

200

200

400

400

200

200

FSI Consumption

1300

1300

1300

1200

1300

1300

Total Consumption

1500

1500

1700

1600

1500

1500

Ending Stocks

340

340

540

740

540

340

Total Distribution

3392

3392

5240

5140

3940

3740

Corn

2014/2015

2015/2016

2016/2017

Market Begin Year

Mar 2015

Mar 2016

Mar 2016

Argentina

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

3500

3500

3500

3500

4200

4500

Beginning Stocks

1408

1408

1909

1909

1614

1614

Production

28700

28700

28000

28000

34000

34000

MY Imports

3

3

5

5

5

5

TY Imports

3

3

5

5

5

5

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

30111

30111

29914

29914

35619

35619

MY Exports

18902

18902

19000

19000

23000

23000

TY Exports

18448

18448

20500

20500

23000

23000

Feed and Residual

6000

6000

6000

6000

6600

6600

FSI Consumption

3300

3300

3300

3300

3800

3800

Total Consumption

9300

9300

9300

9300

10400

10400

Ending Stocks

1909

1909

1614

1614

2219

2219

Total Distribution

30111

30111

29914

29914

35619

35619

Sorghum

2014/2015

2015/2016

2016/2017

Market Begin Year

Mar 2015

Mar 2016

Mar 2016

Argentina

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

770

770

750

750

850

750

Beginning Stocks

1202

1202

971

971

846

846

Production

3500

3500

3375

3375

3900

3400

MY Imports

0

0

0

0

0

0

TY Imports

0

0

0

0

0

0

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

4702

4702

4346

4346

4746

4246

MY Exports

931

931

700

700

1300

900

TY Exports

954

954

900

900

1100

1000

Feed and Residual

2400

2400

2400

2400

2500

2500

FSI Consumption

400

400

400

400

400

400

Total Consumption

2800

2800

2800

2800

2950

2950

Ending Stocks

971

971

846

846

496

396

Total Distribution

4702

4702

4346

4346

4746

4246

Rice, Milled

2014/2015

2015/2016

2016/2017

Market Begin Year

Mar 2015

Mar 2016

Mar 2016

Argentina

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

231

231

207

207

220

208

Beginning Stocks

359

359

586

586

479

430

Production

1014

1014

891

819

1001

920

MY Imports

1560

1560

1371

1260

1540

1415

TY Imports

6500

6500

6500

6500

6500

6500

TY Imp. from U.S.

5

5

5

5

5

5

Total Supply

7

7

5

5

5

5

MY Exports

0

0

0

0

0

0

TY Exports

1378

1378

1482

1410

1485

1355

Feed and Residual

312

312

520

520

600

550

FSI Consumption

310

310

480

480

600

550

Total Consumption

480

480

483

460

475

460

Ending Stocks

586

586

479

430

410

345

Total Distribution

1378

1378

1482

1410

1485

1355