Argentina cuts wheat exports
Following in line with other large wheat-growing countries, Argentina announced it will cut its wheat exports from the 2012-13 crop by 1.5 million metric tons. The reduction is due to disappointing yields from the winter wheat crop.
This South American country was projected to be the world’s No. 5 wheat exporter this season, according to the U.S. Department of Agriculture. USDA now expects Argentina to slip to seventh place now.
Reduced exports from Argentina will likely send Brazilian buyers to other markets to compensate. They may likely turn to North America.
Domestic wheat demand for 2013 is estimated at 6.5 million metric tons, according to Argentina’s Agriculture Ministry.
Total 2012-13 wheat production is estimated at 11.5 million tons by the ministry, while the Buenos Aires cereals exchange expects the crop at 10.1 million tons.
In a sign of future troubles to come, corn exports might also suffer as only 55 percent of the 3.4 million hectares expected to go to corn have been planted this season, which is down 14 percentage points on the year, according to the Buenos Aires Cereals Exchange. Previously, a record corn crop was expected for 2012-13 with 28 million tons projected. It is now looking like it will be near 26 million to 27 million tons.
Argentina only allows exports of corn and wheat after domestic supply has been set aside, which helps to keep down local prices.