Argentina's wheat area is seen slightly bigger than previously forecast and rains have brought relief to crops in recent days, Buenos Aires Grains Exchange said in a report on Thursday. Argentina is one of the world's leading wheat suppliers and markets have been closely watching dry conditions affecting 2010/11 crops in recent weeks, especially as the country is seen as helping plug the supply gap left by drought-hit Russia.
With sowing now complete, the grains exchange raised its estimate for plantings to 4.27 million hectares (10.55 million acres) from the 4.2 million hectares estimated previously. "Bigger plantings in north central Santa Fe and in south-western Buenos Aires explain the new forecast," the exchange said in a weekly crop report. Buenos Aires province accounts for about half the country's wheat production and Santa Fe was the No 3 wheat-producing region during the country's last drought-ravaged campaign, when output sank to a three-decade low of about 7.5 million tonnes.
Rains last week improved the condition of parched crops, and more rains are forecast for the coming days, the exchange said. "Welcome rains last weekend brought relief to wheat crops, making fertilising possible," the report added. Neither the grains exchange nor the Agriculture Ministry has formally forecast 2010/11 production, but Rosario grains exchange put its first forecast at between 9.0 million and 10.5 million tonnes.
The US Department of Agriculture (USDA) estimates the crop at 12 million tonnes. Argentina's growers have also started to plant the first of the 2010/11 corn crop in a few areas, but rains and low temperatures delayed the seedings. Farmers are expected to dedicate 11.6 percent more land to commercial-use corn this year, the exchange said, raising its sowing estimate to 2.93 million hectares from 2.865 million hectares previously.
"The higher forecast reflects the rains, better profit expectations, the need to rotate crops and the record high yields last season," the report said. Argentina is the world's No 2 corn supplier after the United States and production reached a record 22.5 million tonnes last season, according to government figures.
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