The 2022/23 wheat harvest forecast in Argentina has been cut to 11.8 million tons, down from 13.7 million tons previously, the Rosario grains exchange said in its latest report, warning it could fall further amid a protracted drought that is causing great losses for farmers and foreign currency short Argentina.
Argentina is a major wheat exporter, but the current campaign is expected to be the worst in the last seven years.
“The current scenario that Argentine wheat is going through is one of enormous uncertainty, and there may continue to be further cuts,” the Rosario exchange warned.
The institution said its calculations took into account 5.9 million hectares planted with wheat and an area loss of 830,000 hectares.
If the situation persists it could be catastrophic for Argentine wheat production since on average good years the country harvests some 22 to 24 million tons, with an ample surplus to export. Domestic consumption is estimated in 10 million tons with the rest to sell overseas. Under current circumstances, there will be virtually no surplus to export.
Lack of export volumes will also be a major blow for the Argentine Treasury, which desperately needs the export levies to achieve a reasonable level of international reserves in the central bank to finance imports, fuel and debt payments.
Likewise with soybeans, since until last week only 8% of the 17.1 million hectares dedicated for the 2022/23 soybean harvest season has been planted, according to the Rosario exchange.
“Sowing is enforced in areas where there is insufficient water while the predicted storms do not arrive,” the exchange stated, adding that soy planting advanced in areas where there will be no more corn planting – a crop that had little planting lately and was hit by frosts.