Rains in Argentina have not been strong enough to help wheat fields after weeks of dryness, but showers in the eastern farm belt have helped speed corn planting, the Buenos Aires Grains Exchange said on Thursday.
Potential wheat yield losses are estimated at up to 40% in southern Cordoba, eastern La Pampa and western Buenos Aires province, the exchange said in a report. Those areas got less that 20 mm (0.8 inch) of rain on average during the week. "The situation could worsen if dryness continues," it said.
The exchange also published a weather forecast showing no more than 25 millimeters of rain expected in the driest wheat-growing areas over the week ahead. Eastern Argentina has been moist, meanwhile, helping corn sowing advance 4.5 percentage points over recent days to cover 28.7% of the expected planting area nationwide, the exchange said. It expects a 2019/20 corn harvest of 50 million tonnes. Last week, the exchange cut its 2019/20 wheat forecast to 19.8 million tonnes from a previous 21 million tonnes.
The Rosario grains exchange last week chopped its 2019/20 corn crop forecast to 47.5 million tonnes from a previously expected 50 million tonnes, citing dryness and political uncertainty ahead of the Oct. 27 presidential election.
Business-friendly President Mauricio Macri, who won office in 2015 with strong support from farmers, is expected to lose his bid for a second term. Front-runner Alberto Fernandez favours more government intervention in the economy and is expected by industry leaders to increase grains export taxes.
More taxes would put downward pressure on Argentine grains prices. As a hedge against that uncertainty, farmers are shifting away from corn and toward safe-haven soyabeans, which are cheaper to grow and require less upfront investment.
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