A monthly report authored by Luiz Pacheco, director of consultancy Trigo & Farinhas, says that the total wheat production in the four countries of Mercosur (Brazil, Uruguay, Argentina, and Paraguay) will shrink 2.81 percent to 20.3 million tons. The surface in the region would decline 8.16 percent to 18.7 million acres.
The only country in the bloc that would not diminish its output will be Brazil with an increase of 4.70 percent to 7.1 million tons. Luiz Pacheco explains that the traditional wheat producing states in the country, such as Paraná and Rio Grande do Sul, diminshed the surface dedicated to winter cereal, while other states increased the area.
“In the states of Goiás, Mato Grosso and within the Federal District, we have detected an average (area) increase of 10 percent mostly because of demand. In Minas Gerais, there is a 22.47 percent increase compared to the previous season. In the south, the weather is riskier,” forecasts Pacheco.
In Paraguay, the major decline of production will be seen with a 15.93 percent fall to 1.2 million tons. In Argentina, the top producing wheat country in the Mercosur, production will shrink is likely to decrease 5.77 percent to 11.070 million tons, while the surface will have a decline of 6.82 percent to 10.1 million acres.
Luiz Pacheco says that in the next season imports from outside of Mercosur bloc, generally coming from U.S. and Canada, will get to zero. “The final stocks may reach 651,560 tons; an increase of 27.15 percent. Brazil may absorb surpluses from Uruguay and Paraguay. Therefore, big volumes will be available within the bloc at a lower price than U.S. or Canada wheat,” analyzed.
Argentina has currently a stock of nearly 3.2 million tons of wheat that at the moment cannot be exported because of a government ban, but this volume is likely to be released in December, when a new government may take power in the country.