With the world getting smaller and world trade competition heating up, it pays to take a look at the agriculture outlook in other countries. In this vein, the staff at the USDA’s Foreign Agriculture Service estimated Argentina’s crop production for the 2018/2019 crop year.
In a report, FAS staff said Argentine wheat production was forecast at a historic high of 20 million tonnes, driving record exports of 14.2 million tonnes.
Corn production was forecast higher to 40 million tonnes, 9 million more than previous projections for the 2017/18 drought-affected harvest, which could lift exports to a record 27 million tonnes. Domestic consumption was expected to continue increasing, totaling 13 million tonnes.
Grain consumption for animal feed (wheat, barley and corn) was expected to be up because of lower feed reserves after this year’s drought conditions.
CORN PRODUCTION UP
Argentine corn production for marketing year 2018/19 was at 40.0 million tonnes, the second highest volume in history and 9 million higher than the drought-affected 2017/18 crop, the report said. Harvested area was projected to increase 100,000 hectares to a record 5.2 million.
Strong domestic futures prices (with Apr 2019 at $174 a tonne), position corn, with stable production costs, as a strong option for farmers to provide higher income and positive returns next year, the report said. Furthermore, farmers were expected to incorporate corn into their crop rotations to improve soils and combat problematic herbicide-resistant weeds.
However, a higher growth potential could be tempered by the effects of this year’s drought on farmer solvency, the FAS staff said. Many may be forced to plant soybeans, with its lower financial investment.
LATE CORN PLANTING SUSPECT
Planting of late corn or a second corn crop (over a winter crop such as wheat, barley, canola or peas), which is normally planted in the first two weeks of December, was expected to drop in marketing year 2018/19.
Over the past several seasons, the preference for late corn has grown due to stable yields as it skipped flowering in the normally dry and hot window of late December-early January, the staff said. In 2017/18, late corn accounted for about 60% of the country’s corn planted area.
To date, late corn is showing a very poor condition after the extended drought that affected a vast area between December through March, the report said. Most corn planted early (September) yielded better as soils had higher moisture.
FAS contacts anticipate that the share of late planted corn in 2018/19 could drop to 40% to 45%.
Corn production in 2017/18 was estimated at 32.0 million tonnes, 1.0 million below USDA’s, FAS staff said. Late-planted corn had low moisture levels during the season and for harvest in May was not in good condition. Most local analysts and traders estimate 2017-18 corn production at 30.5 to 32.0 million tonnes.
CATTLE, BEEF RECAP
No cattle sold Wednesday on the Livestock Exchange Video Auction, compared with sales the previous week at $122.40 per cwt.
Cash trading last week was at $125 to mostly $126 per cwt on a live basis, compared with mostly $124 to $126 the previous week. Dressed-basis trading was reported at $195, steady to down $3.
The USDA choice cutout Wednesday was up $0.03 per cwt at $230.96, while select was off $0.98 at $208.95. The choice/select spread widened to $22.01 from $21.00 with 94 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Tuesday, was $138.00 per cwt, up $0.09. This compares with Wednesday’s May close of $137.15, down $0.57.