Highlights

Post estimates Argentine wheat production for 2016/17 at 14.4 million tons, and exports at 8.3 million tons, both very similar to USDA. Barley production is expected at 3.0 million tons, 650,000 tons lower than USDA because of a smaller harvested area. A smaller supply will negatively affect barley exports, especially feed barley if finally the quality turns to be good as it currently seems so. Post projects corn production for marketing year 2016/17 at 36.5 million tons, the same as USDA. Exports for 2016/17 are forecast at 26 million tons, 1 million tons higher than USDA. This is because of higher beginning stocks, as Post now estimates production for 2015/16 at 30 million tons, 2 million tons higher than USDA due to greater harvested area. The additional output is expected to allow a larger export volume in 2015/16, at 20.5 million tons, and an increase in carry over of 1 million tons. Post estimates sorghum exports for 2015/16 and 2016/17 at 600,000 tons per year, lower than USDA. Local traders indicate that foreign demand of sorghum is weak. Post projects for 2016/17 a somewhat smaller rice production and area than what USDA estimates.

Wheat: Post estimates harvested area at 4.6 million hectares, 200,000 hectares lower than USDA. Due to extreme wet weather during autumn and winter, many producers were not able to sow as many hectares they had planned. There is a wide dispersion of planted area estimates in the local market, ranging between 4.3-5.2 million hectares. Buenos Aires, Cordoba and Santa Fe provinces account together for more than 80 percent of the country's wheat planted area. The crop condition is good/very good in most of the country, especially after the good rainfall of the past two weeks. However, the weather in the next 3-4 weeks will be key to define yields. Producers planted a larger proportion than normal of higher quality wheat varieties demanded by local mills and have used better technology (especially the level of fertilization) in their crops. Yields are expected to be somewhat higher than in the past crop seasons, but most importantly; the quality of grain is anticipated to be significantly better. Argentine production in the past few years had a large proportion of low quality wheat which was primarily exported as feed. The harvest of the crop season 2016/17 began in the Northern provinces, but the core of the harvest will go from Mid-November through early January 2017.

With wheat production estimated at 14.4 million tons in crop 2016/17, Post projects total exports at 8.3 million tons (including flour and products), 300,000 tons higher than USDA's official number. A higher carry over from the previous crop season would result in additional volumes for export. Of the total exports, a little over 7 million tons would be wheat. The main market is expected to be Brazil, the historic, natural market for Argentine wheat and flour. During Argentina's previous administration, exports of wheat were limited in order to keep the domestic market well-supplied and maintain low local prices. In 2013 and 2014 exports to Brazil dropped by more than half, to about 2 million tons. This forced the neighboring country to reach out to other suppliers, such as the United States. Argentine wheat exports to Brazil in 2016/17 are forecast at 3-4 million tons. Local traders indicate that Argentina's comeback most likely will negatively affect wheat exports from the United States, especially those directed to supply the center-south of Brazil. Total Argentine wheat flour exports for 2016/17 are projected at 850,000 tons (product weight), the equivalent to 1.1 million tons of wheat. This is the highest volume since 2012. Of the total, Brazil is forecast to purchase some 600,000 tons, Bolivia 200,000 tons and Chile 20,000 tons.

With the new policies that the Macri Administration put in place late last year, total wheat exports rebounded significantly in 2015/16. Wheat monthly exports jumped from 53,000 tons in December 2015 to 940,000 tons in January 2016. The following months showed large volumes until August-September which began to slow down. Exports of feed wheat to South East Asia countries and South Korea were unusually high, as traders exported high stocks of low protein wheat produced in the 2014/15 and 2015/16 crops.

Wheat domestic consumption for 2015/16 is estimated by post at a total 5.9 million tons, 250,000 tons lower than USDA. Based on official data, the milling in the first 7 months of 2016 dropped 5 percent. This is a reflection of a slow economy which is adjusting to a new environment proposed by the Argentine government in order to have a more sustainable economy in the future. Most economists are quite optimistic about the country's growth as of 2017.

Barley:Post continues to forecast harvested area for 2016/17 at 800,000 hectares and a production of 3.0 million tons, while USDA' official projection is a t 975,000 hectares and 3.65 million tons of production. As in wheat, a very rainy year delayed the harvest of summer crops (corn and soybeans) in many fields, and in others, it complicated the sowing due to a high water table. In a few cases farmers were not able to access their farms as dirt roads were inaccessible. Area projections in the local market range from 700-990,000 hectares. After peaking in the 2012/13 crop, with 1.5 million hectares, in the midst of the government intervention in the local wheat market, barley area in Argentina would seem to be returning to its historic area of 500-600,000 hectares. The current crop condition is good, and as in wheat, the use of technology was far greater than past seasons. Farmers are aiming to produce good quality to be able to obtain price premiums from the malting industry and exporters. Post estimates production for 2015/16 at 4.8 million tons, 140,000 tons lower than USDA. The market estimates range between 4.6-4.9 million tons.

Post projects barley exports for 2016/17 at 1.4 million tons, lower than USDA's 2.1 million tons, primarily explained by the difference in production estimate. Argentina is expected to export some 700-800,000 tons of malting barley to neighboring countries and about 600,000 tons of feed barley. So far, the quality of barley is expected to be good, with small supplies of feed quality barley. The current price differential between malting and feed barley is US$50 per ton. Feed barley exporters foresee price tension in the market and complications to originate as farmers will want to sell at the higher price, but current FOB prices do not allow it.

Domestic consumption of feed barley in 2016/17 is expected to drop to 200,000 tons in 2016/17, more in line with normal years, especially if the quality of the new crop is better than normal. In 2015/16, barley domestic consumption for animal feed was larger (Post's estimate is 100,000 tons higher than USDA). This was due primarily to large supplies of poor quality barley and its price relation vis-à-vis other feed alternatives.

Post projects the carry-over of barley for 2016/17 at 590,000 tons. Some 250,000 tons would be in the hands of malting plants and the balance in the hands of producers. This is somewhat lower than USDA's 730,000 tons, primarily explained by the difference in expected production for crop 2016/17 and a lower carry in stock from crop 2015/16. Local industry contacts indicate that ending stocks in November 2016 will range between 400-500,000 tons, with barley of both malting and feed quality.

Corn:Production for marketing year 2016/17 is projected at 36.5 million tons, the same as USDA. To date, roughly 25-30 percent of the planting was finished. Until a few weeks ago, some areas were lacking soil humidity and in general temperatures were below the optimum for planting. But rains in the past few weeks are allowing farmers to finish the planting of early corn, which in crop 2016/17 is estimated to account for 40-45 percent of the country's total corn area. This percentage is more in line with previous years (except in the 2015/16 crop, where late corn planting increased significantly at the last moment as the new government in place announced changes in policy favoring its planting). Post forecasts harvested area for 2016/17 at 4.5 million hectares, the same as USDA. A few months ago the market was somewhat more optimistic in the growth in area, but late price fluctuations and relations between corn and soybeans have made some farmers change their planting decisions slightly. As an example, the grain exchange of Cordoba province estimates a growth of 170,000 hectares (+11%) in the coming crop season. Cordoba accounts for approximately one third of the country's total corn area. There is a wide range in local estimations of planted corn area for commercial grain. While the private sector's estimates range between 4.5-4.9 million hectares (planted), the government's official estimation is 7.28 million hectares for total corn planted area (versus 6.9 million hectares in 2015/16 of which 1.5 million hectares were lost, made into silage or fed directly to cattle).

Post increases harvested corn area for 2015/16 to 3.7 million hectares, 200,000 hectares more than USDA and corn production at 30.0 million tons, 2.0 million tons higher than USDA's official number. The market agrees that additional hectares were harvested, especially in the center-north part of the country. Final yields were somewhat higher than previously expected. A very wet season complicated much the logistics for harvesting and transportation, but played in favor of sustained, high yields.

A higher production estimate for the 2015/16 crop is expected to allow additional exports of 1 million tons more than USDA estimates, totaling 20.5 million tons. With unchanged domestic consumption, ending stocks for 2015/16 are expected to increase by 1 million tons at 2.1 million tons. This level of carryover is expected to add to volumes for export in 2016/17, which Post now forecasts at 26.0 million tons, 1.0 million tons higher than USDA's projection. Local traders have already purchased approximately 4.0 million tons of the 2016/17 crop, which is currently being planted. This is a significant change from how the market operated until a year ago with the previous administration controlling corn exports. Current future prices for April 2017 in the local market are in the area of US$150 per ton.

Sorghum: The only difference that Post has with USDA's official data is the level of exports for both 2016/17 and 2015/16. Local traders foresee a very slow market for both years as world stocks of feed grains are high. Sorghum exports from Argentina in 2015/16 have totaled through September 2016 370,000 tons, with almost half the exports of the same period in the past two years. Japan is almost the exclusive buyer. Some additional shipments are expected for December 2016.

Ending stocks for 2016/17 are projected at 796,000 tons, higher than USDA's 396,000 tons. The difference is mainly explained by Post's lower export forecast.

Rice: Production for 2016/17 is forecast at 1.415 million tons (rough production), 125,000 tons lower than USDA. While planting in Corrientes province will increase almost 3,000 hectares there will be some drops in Entre Rios and Santa Fe. Post's total harvested area is projected at 208,000 hectares. The drop is not greater because rice producer prices increased 50-60 percent in the past five months in local currency, improving producers' future returns. The final production for the 2015/16 season was 1.26 million tons (rough production), 140,000 tons lower than USDA. Approximately 207,000 hectares were harvested (4,000 hectares were lost), with an average yield of 6 tons per hectare. These were lower than the average as the El Nino weather brought too much rain and cloudy days. Post projects Argentine rice exports for 2016/17 at 500,000 tons, 50,000 tons lower than USDA. At current high domestic prices, local traders foresee exports will be slow.

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

4957

4957

3945

3945

4800

4600

Beginning Stocks

2490

2490

4804

4804

859

1109

Production

13930

13930

11300

11300

14400

14400

MY Imports

35

35

5

5

5

6

TY Imports

35

35

3

3

5

6

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

16455

16455

16109

16109

15264

15515

MY Exports

5301

5301

9100

9100

8000

8300

TY Exports

4200

4200

8860

8860

8000

8300

Feed and Residual

300

300

100

200

100

100

FSI Consumption

6050

6050

6050

5700

6200

6200

Total Consumption

6350

6350

6150

5900

6300

6300

Ending Stocks

4804

4804

859

1109

964

915

Total Distribution

16455

16455

16109

16109

15264

15515

Barley

Market Begin Year

Argentina

2014/2015

2015/2016

2016/2017

Dec 2014

Dec 2015

Dec 2016

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

900

900

1250

1200

975

800

Beginning Stocks

492

492

340

340

780

490

Production

2900

2900

4940

4800

3650

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

5280

5140

4430

3490

MY Exports

1552

1552

2900

2950

2100

1400

TY Exports

1599

1599

2800

2850

2100

1400

Feed and Residual

200

200

400

500

300

200

FSI Consumption

1300

1300

1200

1200

1300

1300

Total Consumption

1500

1500

1600

1700

1600

1500

Ending Stocks

340

340

780

490

730

590

Total Distribution

3392

3392

5280

5140

4430

3490

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

3700

4500

4500

Beginning Stocks

1408

1408

1909

1909

1114

2114

Production

28700

28700

28000

30000

36500

36500

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

31914

37619

38619

MY Exports

18902

18902

19500

20500

25000

26000

TY Exports

18448

18448

21300

22300

25500

26500

Feed and Residual

6000

6000

6000

6000

6800

6800

FSI Consumption

3300

3300

3300

3300

3700

3700

Total Consumption

9300

9300

9300

9300

10500

10500

Ending Stocks

1909

1909

1114

2114

2119

2119

Total Distribution

30111

30111

29914

31914

37619

38619


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

750

750

Beginning Stocks

1202

1202

971

971

846

946

Production

3500

3500

3375

3375

3400

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

4246

4346

MY Exports

931

931

700

600

900

600

TY Exports

954

954

900

800

800

500

Feed and Residual

2400

2400

2400

2400

2550

2550

FSI Consumption

400

400

400

400

400

400

Total Consumption

2800

2800

2800

2800

2950

2950

Ending Stocks

971

971

846

946

396

796

Total Distribution

4702

4702

4346

4346

4246

4346

Rice

2014/2015

2015/2016

2016/2017

Market Begin Year

Apr 2015

Apr 2016

Apr 2016

Argentina

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

231

231

208

207

220

208

Beginning Stocks

322

322

529

529

364

373

Milled Production

1014

1014

910

819

1001

920

Rough Production

1560

1560

1400

1260

1540

1415

Milling Rate (.9999)

6500

6500

6500

6500

6500

6500

MY Imports

5

5

5

5

5

5

TY Imports

7

7

5

5

5

5

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

1341

1341

1444

1353

1370

1298

MY Exports

312

312

560

520

550

500

TY Exports

310

310

560

480

550

500

Consumption and Residual

500

500

520

460

540

460

Ending Stocks

529

529

364

373

280

338

Total Distribution

1341

1341

1444

1353

1370

1298