Argentina seen harvesting more wheat this year despite frost

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Argentina is on track to harvest more wheat this season than last as greater acreage and coming warm weather should offset any yield loss caused by recent frosts that hit in the last days of the Southern Hemisphere winter.

The grain powerhouse should produce more than the 8.2 million tonnes it reported last season. Harvesting starts in November and forecasts call for warm weather after the wheat belt got blasted by Antarctic air the past few days.

"There have been frosts, but not enough to significantly damage yields. We can come back from this," said Ruben Sgalippa, who owns a farm in the town of Carlos Casares, Buenos Aires province. Other growers around the Pampas grains belt echoed Sgalippa's take on the situation.

The USDA sees a 2013/14 Argentine wheat crop of 12 million tonnes, up from 10 million tonnes the previous season. Planting intentions increased this year thanks to a local price surge caused by high early-season exports.

A big crop is needed in Argentina after last year's smaller harvest tightened supplies and drove up local bread prices. World buyers, including neighbor Brazil, also need Argentina's wheat as global demand for grain is on the rise.

U.S. wheat exports are already up 40 percent this year versus 2012 as buyers look to America for supplies needed to compensate for a poor Chinese crop and possible low yields in Argentina, where growers strive to avoid planting wheat in order to skirt onerous export curbs imposed by the government.

"The acreage planted this year is larger than last year, and the crop looks better, although we have had drought in some areas, and many frosts," said David Hughes, who manages 7,000 hectares of farmland in northern Buenos Aires province.

"All considered, total production should be greater than last year," he added.

Another cold snap is forecast for Pampas grains belt this coming weekend, but several weather experts said it will not be as severe as the four-day cold spell that ended on Tuesday.

"We are getting more light each day as we get into spring. This will provide a floor for temperatures in the wheat belt," said Anthony Deane, head of consultancy Weather-Wise Argentina.

"There is a cold front moving in. But temperatures, generally, will not be as low as they were last weekend," he said. "This cold snap won't be as extreme as the previous one."

Wheat Crop at Vulnerable Stage

Late-planted Argentine wheat is at the height of its weather-sensitive flowering period as spring gets underway. Frosts this week threatened to hurt yields and pile more pressure on Brazil, the country's top wheat client, to look for alternative sources.

While the Argentine harvest should be healthy, much wheat will be needed domestically after the government based last season's wheat export permits on overly-optimistic crop estimates, leaving little in the country to be milled into bread and driving up the price of basic food staples.

Argentina caps corn and wheat exports in a bid to ensure ample domestic food supplies. Farmers complain that the export quotas, which can be raised and lowered throughout the year, kill competition among buyers and make crop planning impossible.

Her popularity already sagging due to double digit inflation in Latin America's No. 3 economy, President Cristina Fernandez is sure to clamp down on 2013/14 wheat exports to ensure voters have food on their tables as she ends her second term in power.

Warmer Days Ahead

"As we progress into spring, it is unlikely that we will get temperatures as low as they were over recent days. It is possible, but not likely," said Liliana Nunez, chief agro-meteorologist at the government's SMN weather institute.

In a last gasp of the Argentine winter, temperatures recently dropped to as low a 10 degrees below zero Centigrade in the wheat belt, which is centered in Buenos Aires province and includes parts of Cordoba, Santa Fe, Entre Rios and La Pampa.

SMN's forecast through Saturday shows minimum lows of 10 degrees above zero, Nunez said.

The recent combination of cold weather and dry planting conditions could however take a significant toll on Argentine 2013/14 wheat output, even if the weather remains stable.

The full extent of the recent frost damage on wheat will not be known for several days, as it takes time for wheat plants to turn brown and die after getting too much cold.

The agriculture ministry has cut its 2013/14 wheat planting area estimate to 3.4 million hectares (8.4 million acres) from a previous forecast of 3.9 million hectares, citing dry soils left by a rainless August and early September.

In the previous season, growers planted 3.16 million hectares with wheat, yielding a total of 8.2 million tonnes, according to Argentine government data.

Corn planting also has been delayed by the bad weather, pushing farmers toward planting more hardy soybeans instead. Argentina expects a corn crop of at least 30 million tonnes, well above the 26 million estimated for the country by the U.S. Department of Agriculture (USDA).


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