Argentina’s 2022-2023 Wheat Output Estimates Cut By 1.5 Mil mt to 15 Mil mt: BCR

Argentina’s wheat output estimates have been scaled down for marketing year 2022-23 (December-November) due to continued drought and frost conditions in key growing regions.

The Rosario Grains Exchange, or BCR, on Oct. 19, reduced its forecast for wheat output in MY 2022-23 to 15 million mt, 1.5 million mt lower than previous estimates. The output is seen nearly 35% lower on the year.

Major wheat growing regions such as Cordoba and Santa Fe have reported the sharpest decline in output projections, with production expected to plunge 48% on the year to 2.6 million mt in Santa Fe, the exchange said.

The BCR has pegged Argentina’s wheat planting area to shrink by nearly 400,000 hectares on the year to 5.9 million hectares in MY 2022-23.

It has projected the average yield at 27.2 quintal/hectare (2.7 mt/hectare) for MY 2022-23, down 8 quintal/hectare on year.

This follows a recent cut in production estimates by the Buenos Aries Grains Exchange to 16.5 million mt in MY 2022-23, down 5.7% from their previous estimate. The BAGE pegged wheat output in MY 2021-22 at 22.4 million mt.

“Frost recorded last weekend generated damage to the crop, while 9% of the implanted pictures are in bloom,” BAGE said in a report.

It pegged Argentina’s wheat plantation for MY 2022-23 at 6.1 million hectares, down from 6.7 million hectares in MY 2021-22.

The US Department of Agriculture also scaled down its estimates for Argentina’s wheat output to 17.5 million mt in its October World Agricultural Supply and Demand Estimates report, down from 19 million mt the previous month.

Wheat sales surge

An anticipated drop in supply forced buyers to accelerate their purchases for Argentina’s wheat.

Argentina wheat sales surged by more than 25% for current MY 2021-22 as crop sales stood at 22.348 million mt in the week ended Oct.13, the latest data from the agriculture ministry showed Oct.19. Total export registration for the current crop also increased by over 38% to 14,553 mt during the same period.

Advance sales of wheat are also likely to rise as cumulative export registration for MY 2022-23 stood at 8,849 mt, slightly higher than the previous year.

A decline in Argentina’s wheat output is likely to lead to a shortage of milling wheat supply in South America and Southeast Asia.

Source: https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/agriculture/102022-argentinas-my-2022-23-wheat-output-estimates-cut-by-15-mil-mt-to-15-mil-mt-bcr