The excess of moisture in the foremost wheat producing areas of Argentina have delayed the planting of the cereal. The country’s Ministry of Agriculture had predicted that the total wheat surface would be 1.1 million acres, but apparently would not be possible to reach this total planted area.
The Buenos Aires Cereal Exchange now says that the surface was adjusted to 1.03 million acres. The excess of precipitations were seen mostly in the southeast and center of the Buenos Aires province.
In Paraguay, approximately 46 percent of the second corn crop is already harvested, according to data released by Agridatos consultancy, which is based in Ciudad del Este. The total surface is estimated at 1.5 million acres.
As Paraguayan farmers harvest the second corn crop, they anticipate soybean planting and may be able to harvest the soy in January. Some trading companies worry about the quality of the corn being harvested currently and the impact on prices. Unlike in the last season, when the ton was purchased for nearly US$ 200, today the cereal is paid US$ 110/ton in the South American country.
Farmers from the Brazilian state of Mato Grosso were caught by surprise with rains in this time of the year. Currently, it is the off-season for soybeans and the corn harvest reached 50 percent of the total surface, according to Soybean and Corn Growers Association.
The higher moisture can bring serious consequences for the crops. According to the weather service Somar Metereologia, the weakening of the El Niño phenomenon brings a cold front stronger than the typical ones. A “corridor” of clouds was formed this week from the North to the Southeast of Brazil, passing over the center-western state of Mato Grosso.
“The rains make an enabling environment for the growth of volunteer plants, which can be a bridge for the Asian rust”, Nery Ribas, president of the associatio, told Brazil’s portal Agrolink.
The wheat planting has finished in the Brazilian state of Paraná, according to the local Department of Agriculture. Nearly 52 percent of the crops are at the reproductive stage and a new cold front getting to the state might affect the crops on Friday and Saturday mostly in the west. The temperatures would go down, but not enough to bring frosts to producing regions.
In Rio Grande do Sul, another southern state in the country, the worries are again with the extensive rains. In the end of June, part of the wheat crops suffered soil erosion and some areas were reestablished, according to a report from local newspaper Zero Hora. The Center of Advanced Studies on Applied Economics of the University of São Paulo expects that prices would still drop in Brazil.
According to Climatempo, a weather forecast service from Brazil, a strong cold front arrived in southern Brazil this week. Torrential rains already affected wheat, soybean, corn, and tobacco crops mostly in the west of the state of Rio Grande do Sul. There is a possibility of snow in the south of the neighboring state of Santa Catarina by Thursday.
Farmers in Brazil are preparing for the corn and soybeans summer crops, which may be planted in September. The real impact of the soil moisture may be seen just in May of next year.
A trading company from Argentina has revealed to Brazilian consultancy Trigo & Farinhas that the country has nearly 1.7 million tons of wheat available to exports, but currently cannot be exported. Argentina produced 10.3 million tons of the cereal in the 2013/2014 season and used 5.6 million tons for domestic consumption. The government authorized a quota of 1.5 million of exports that already was sold. About 500,000 tons of the stock were used for seed reserves. Therefore, that leaves the South American country with 1.7 million of wheat leftovers.
There are reports of conversations between the government, farmers, and traders, but there still isn’t no prediction of when an additional quota would take place. Brazil has currently demand for Argentina’s wheat, but would start its harvest within a month.
According to data released by Trigo & Farinhas consultancy, the ratio of final stocks of wheat and domestic consumption of each year in the Mercosur countries (Brazil, Uruguay, Paraguay, and Argentina) is 17.39 percent. The consultancy also forecasts that prices would not overcome R$ 620 (US$ 278.49)/ton. “The main cause of this is a total wheat production increase of 26.69 percent in the Mercosur. That is the price trend if the weather or a war do not change everything”, says Luiz Pacheco, editor of the Trigo & Farinhas bulletin.
In Argentina, the production of the cereal jumped 19.04 percent to 12.5 million tons. In Brazil, it would increase 33.84 percent to 7.3 million tons, and 128.19 percent of bigger output in Paraguay. The only country in the bloc that will reduce the production is Uruguay with 31.2 percent less. Therefore, the stocks would finish 31.95 percent higher.
The soybean production cost has risen nearly five percent on average since 2009/2010, according to a survey from international consultancy INTL FCStone. The average cost to date jumped from R$ 1,847 (US$ 828.62) per hectare in 2009 too R$ 2,359 (US$ 1,058.32) per hectare in 2014. The main aspect considered for the inflation was the cost of seeds, agrochemicals, and fertilizers. There was also the local currency devaluation in the period, which boosted the inputs prices.
Exports of grains and other commodities have stopped in Rosario since yesterday, according to local unions. “Truck cannot be unloaded and the barges cannot be loaded. Everything stopped”, Guillermo Wade, manager of the maritime activities chamber, told Reuters.
The Brazilian state of Rio Grande do Sul will increase its wheat area compared to last year to 2.7 million acres, according to agronomist Carlos Dellavalle, owner of DeAgro. Last month, there were reports of losses to some farmers, but the wheat surface is still expected to be a record.
Delkavalle says that planting is delayed and there is still 15 percent of the area to go. According to him, however, this expansion is not very good because prices are lower. “By the time planting was projected, there was a good demand because of the Crimea conflict. With the conflict, there were estimates of higher prices, but this was confirmed and, even worse, the government dropped the external tariff on imported wheat”, Dellavalle told Brazil’s portal Agrolink.