Rainfall in Argentina fails to quench drought, says grains exchange

Credit: REUTERS/Agustin Marcarian

BUENOS AIRES, Sept 22 (Reuters) - Last week's rainfall was not enough to reverse drought impacts it Argentina's main breadbasket, the Buenos Aires Grains Exchange (BdeC) reported on Thursday, adding that a dip in wheat yields is likely for the major grains-producing country.

The wheat planting area for the 2022/2023 harvest is seen at 6.1 million hectares, below the 6.6 million hectares estimated at the beginning of the cycle before drought conditions began to bite. As a result, BdeC estimates that wheat yields will fall by as much as 60% during the 2022/2023 season.

Argentina is a key global wheat supplier but has been suffering from drought for months.

BdeC noted in its weekly report that an increased number of fields no longer planned for wheat will switch to growing corn or soybeans instead.

The BdeC's latest forecast is in line with a projection from the Rosario Grains Exchange (BCR) that on Wednesday reduced its wheat production estimate to 16.5 million tonnes, down from 17.7 million tonnes also due to drought.

The BdeC added that through Wednesday, farmers had planted 3% of the estimated 7.5 million hectares planned for the 2022/2023 season, or 5.5 percentage points fewer plantings than during the previous cycle, again due to prevailing dry conditions.

The Rosario exchange also cut its corn production estimate by 2 million tonnes to 56 million tonnes, hit by what it described as "the worst" drought in decades.

(Reporting by Maximilian Heath; Editing by David Gregorio)


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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