Argentina expects a record 2017/18 wheat crop of about 20 million tonnes thanks to farmers' investment in more and better crop technology, the government's chief of agricultural estimates told Reuters on Monday, a forecast well above private estimates. Argentine wheat is planted mostly in May through July, with harvesting reaching into January.
The upcoming crop could jump from the all-time high 18.4 million tonnes collected in the 2016/17 season, Martin Moreno, the Agriculture Ministry's chief forecaster, said in a telephone interview. "We are basing that on an increase in use of technology by farmers, and in increase in the quality of that technology. We are principally talking about new seed varieties and fertilizers," he said.
The widely referenced Buenos Aires Grains Exchange forecasts a 2017/18 wheat harvest of 17.5 million tonnes, up from 16.3 million tonnes in 2016/17. Argentine growers have piled into wheat and corn since late 2015, when free-market advocate Mauricio Macri was elected president.
Macri eliminated the 20 percent and 23 percent export taxes that the previous government had put on corn and wheat exports, respectively. He also ditched the previous administration's strict corn and wheat export quota system, which killed competition among buyers and depressed local wheat prices. For years, lack of profitability depressed demand for new wheat technology in Argentina while growers concentrated on soybeans, which were not subject to export quotas.