Argentina Wheat Update: Rainfall Just in Time

As dryness continued from early wheat planting in May until the early growth stages in September, Argentina's 06/07 wheat crop outlook was dire. Earlier this season, dryness hampered planting progress, such that planting intentions were decreased in July, August, and September in reports published by Argentina's Ministry of Agriculture (SAGPyA). As the end of August approached, the optimal planting window had closed and intended wheat area had been left unplanted in several important wheat growing provinces, namely Buenos Aires, Córdoba, Santa Fe, and La Pampa - further reducing Argentina's forecast harvested wheat area.  Continued dryness threatened yield potential during the early growth stages, but beneficial rains finally arrived in the beginning of October.  Although these rains were variable, they were critical in maintaining the forecast yield of 2.55 tons per hectare.  Largely due to this precipitation, USDA’s October area and production estimates of the 2006/07 Argentina wheat crop remained unchanged at 5.2 million hectares and 13.25 million tons, respectively.

While significant rainfall was received in early October, yields did suffer from dryness in Santa Fe and Córdoba, where wheat was in the critical stage of flowering, as shown on the left.  In their October 2 report, the Buenos Aires Grain Exchange rated 33 percent of the wheat crop to be in bad condition, which likely came from this central wheat area. Because of the early October rains, however, the wheat in the major producing province of Buenos Aires was mostly in good to very good condition, thus offseting the likely yield reductions in Santa Fe, Córdoba, and the northern provinces. In their October 13 report, the amount of the crop in poor to very poor condition had dropped slightly to 29 percent, while the 52 percent of the crop was in good to very good condition (up from 46 percent on October 2).

Although potential yield has been lowered in central Argentina, the majority of Argentina's wheat is grown in Buenos Aires province where recent precipitation has been very beneficial.  The two major producing delegations of Buenos Aires are Tres Arroyos and Tandil, which account for approximately 21 percent and 11 percent of Argentina's wheat production, respectively. According to WMO station data (see graphs below), cumulative precipitation in Tandil and Tres Arroyos is now near normal and resembles last year's precipitation. USDA forecasts yields in these two delegations to be similar to last year. While soil moisture reserves in Buenos Aires province are high due to near normal cumulative precipitation, PECAD models indicate a lack of soil moisture in central and northern regions. This dryness will need to be monitored as yield forecasts become more developed as the crop moves closer to harvest.

Current USDA area and production estimates for grains and other agricultural commodities are available on PECAD's Agricultural Production page or at PSD Online.