BUENOS AIRES, ARGENTINA — Wheat production in Argentina in 2019-20 is forecast at a record 20.8 million tonnes, according to an Aug. 7 Global Agricultural Information Network (GAIN) report from the U.S. Department of Agriculture (USDA).
The USDA said planted area for this marketing year has grown by 200,000 hectares to 6.4 million hectares. Planting is nearing 95% complete despite some areas struggling to complete planting due to wet conditions.
“Sufficient ground moisture from winter has the crop in good condition,” the USDA said. “Due to 2018-19 strong returns, producers are expected to increase inputs and technology to drive higher productivity in 2019-20.”
The USDA said it is expecting an average yield of 3.25 tonnes per hectare, which is higher than the average yield of the past 5 to 10 years.
Given larger wheat production forecasts for 2019-20, exports may grow to a record 14.3 million tonnes (including flour that is calculated as wheat equivalent), the USDA said.
“Larger global supplies over last year, when some principal exporters had production issues, may see domestic prices trending lower in the future,” the USDA said. “However, analysts are watching Australia’s dry weather and Brazil frosts for impacts on the market. Estimates are that Brazil, Argentina’s main wheat destination, will need to import an additional 500,000 to 1,000,000 tonnes than earlier projected due to weather issues.”
Through early July, traders had purchased 1.8 million tonnes of the 2019-20 crop for export, nearly 1 million tonnes below a year ago. Export projections for 2018-19 remain at 13 million tonnes on strong production expectations.
Domestic wheat consumption for 2019-20 is forecast at 5.8 million tonnes, 100,000 tonnes lower than the USDA’s original estimate, as a sluggish economic recovery continues into 2020.