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Argentina’s wheat crop sales surge amid supply concerns

Argentina’s 2021-22 export wheat sales have almost doubled on the year, driven by concerns over a tightening global milling wheat supply outlook.

Argentinian farmers sold nearly 400,000t of wheat in the week to 17 November, with 346,000t bound for export, agriculture ministry data show.

New-crop export wheat sales now stand at 10.31mn t, up from just 5.76mn t at the same point last year, as importers try to secure milling wheat volumes amid uncertainties over Australian crop quality and expectations that Russia will further tighten export restrictions.

Heavy rain in eastern Australia continues to disrupt harvesting, reducing crop quality, and about 40pc of Australian wheat from the 2021-22 crop could be unfit for milling.

Meanwhile, Russia — the world’s largest wheat supplier — is expected to introduce a wheat export quota in February, while modifying its floating export duty formula to impose higher taxes if global prices rise further. This could exacerbate already tight global milling wheat supply.

Meanwhile, Argentina is on track to harvest a bumper wheat crop of 19.8mn t in 2021-22, according to the Buenos Aires Grains Exchange (Bage). This is slightly lower than the US Department of Agriculture’s forecast of 20mn t. USDA also sees exports hitting a record, at 13.5mn t.

Despite delays in harvesting caused by rain, Argentina’s wheat crop conditions remain promising, with 59pc rated ‘good-to-excellent’ on 17 November, compared with just 17pc a year earlier, Bage said.

With Argentinian wheat in such high demand, Brazil — which usually absorbs just under 50pc of Argentinian wheat exports — could face stiff competition from other importers.

Argentina’s new-crop corn sales are also robust, with 595,000t sold in the week to 17 November, up from 412,000t the previous week.

This takes overall 2021-22 Argentinian corn sales to 10.71mn t, up from 10.29mn t a year earlier, with 10.64mn t bound for export.

Favourable weather continues to drive expectations for record production in 2021-22, with 91pc of the crop rated ‘good-to-excellent’ on 17 November. Argentinian corn production is forecast to hit 54.5mn t this year, with exports projected at 39mn t, up by 500,000t from 2020-21, according to USDA.

But Argentina’s new-crop soybean sales slowed further, to just 110,000t on 11-17 November. Total sales of the 2021-22 soybean crop continue to lag last year’s by about 846,000t, with 3.25mn t sold by 17 November. About 374,000t was headed for export, while 2.87mn t was sold to domestic crushers.

 

Argus Media

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