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 News

04/09/2017 0:00 - Agricultural Commodities Market
SOFÍA CORINA - EMILCE TERRÉ
Argentina crop production 2017/18 heading to new record

In spite of a reduction in prospective plantings in Buenos Aires and La Pampa, total planted areas would increase about half a million hectares (or around 1.5%) nationwide in the 2017/18 campaign. Based on trend yield estimates for main crops and historical averages for marginal ones, total grains production is expected to come in around 127 million tons, 1% above last season and a new record.

Members of the agribusiness industry have kept their optimist ahead of the 2017/18 season, with rising planting intentions for some of the main crops, including wheat and corn. However, water excesses keep affecting a great part of the national agriculture area, limiting the rise in projected area.

At a national level, it is projected that the planted area will rise to 37.2 million hectares in 2017/18 season; 1.15% more than previous cycle. Among different crops, corn and sunflower stand out, with 7% and 5% year-over-year increases respectively. Wheat plantings, on the other hand, only would rise 2%, given excess moisture in fields preventing fieldwork.

On the contrary, soybean area is expected to fall for a second year in a row, with an additional 2% drop ahead of the 2017/18 marketing year. Behind this fall are an increase in ending stocks in the previous marketing year and strong competition from corn, with improved profit margins since December 2015. What’s more, the first bids for new soybean have not been very attractive to sellers, and are not really expected to pick up given tight profit margins for both exporters and the processing industry.

Barley area would decrease 6% (as a counterpart to the risen in wheat area) while sorghum area would fall 2% (because of the interest in corn).

 

Yields for main crops were assumed trend according to more investment in tech application and crop protection, while marginal crops where projected to show yields equal to their average for the past 5 years.

As a result, total production for the 2017/18 MY is projected to be 127 million tons, the greatest volume in Argentinian history. This production is 1% above the last season figure and 15% over the output obtained just two years ago.

Breaking down the previous estimates, we can mention that soybean production is expected to fall to 55 million tons, its lowest level in 4 years. However, given that stocks from the previous campaign are expected to end around 15 million tons, total domestic supply is still projected to stand at record levels.

On the other hand, corn would increase its share of total grain production, rising to 32%, up 6 percentage points in only two years. Wheat would also see its share increase to 13% from 9% two years ago.

 

The present estimates are just preliminary projections based on data. On September 13, the Strategic Guide for Agribusiness (GEA) will present its first survey-based corn area estimates. There is still a long way to go before we can pin down precise numbers on the 2017/18 marketing year, given uncertainty about weather conditions.

 

 Institutional video


Institutional Video of the Bolsa de Comercio of Rosario (Rosario Board of Trade)

 Rosario Board of Trade

The Rosario Board of Trade is a centennial institution located in Rosario, in the most important agroindustrial zone of Argentina. Throughout its history it has created and boosted transparent, solid and reliable markets: the Grains Physical Market, the Futures Market, the Capital Market, and the Livestock Market.

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