Argentina has emerged as the latest country to face potential setbacks over wheat, with adverse weather threatening its recovery from a century-low in plantings.
"A new concern is bubbling up in Argentina. It is dry," US broker US Commodities said, noting that 79% of the South American country's intended wheat acreage had been planted as of last week. Typically, farmers have all but finished sowings by now.
The concerns were echoed by Rabobank analysts, who warned of a "great deal of uncertainty" regarding Argentina's wheat crop, South America's biggest, and one typically drawn on by regional importers such as Brazil.
"Dry conditions in some areas of the country, especially in the south and west of the wheat region, might prevent planting intentions from being fully realised," the bank said.
Dry weather has already cut hopes for crops in the European Union, Western Australia and, in particular, Kazakhstan and Russia, sending wheat prices jumping on international markets.
'Climatic and economic uncertainties'
The range of initial production estimates for the crop was "wide", Rabobank added, noting forecasts "varying from private analysts' 10m tonnes to the [Argentine] Ministry of Agriculture's 15m tonnes".
The bank itself, highlighting "climatic and economic uncertainties", pegged the drop at 10m-12m tonnes.
Fears are brewing for the coming of a so-called La Nina weather pattern, associated with cooler-than-normal Pacific water temperatures, and typically associated with dry weather in Argentina.
Drought was a big factor in a slump of more than 30% in Argentina's wheat area last year, with farmers also blaming government export curbs, which have been partly relaxed this year.
However, rain in many parts of Argentina's wheat belt has raised hopes among some analysts that the country can avoid significant La Nina damage this year, with the government blaming sowing delays largely on "constant rains" in the province of Buenos Aires.
Prices slip
The Argentine warnings came as analysts revealed further rises in prices of Russian wheat last week, with the grain, free-on-board, attracting $210 a tonne, compared with $198 a tonne a week before, according to the Institute for Agricultural Market Studies.
SovEcon said that, in the domestic market, poorer fifth-grade wheat had risen most strongly, soaring by 950 roubles per tonne to 4,450 roubles per tonne. The price of third-grade milling wheat soared by 600 roubles per tonne to 4,850 roubles per tonne.
However, prices on international markets sagged on Monday, with Chicago wheat down 0.5% at $5.93 ½ a bushel at 10:00 GMT.
In Europe, Paris wheat for November was 0.6% lower at E178.75 a tonne, with London wheat for November down 1.5% at £132.00 a tonne.
Source: http://www.agrimoney.com/news/argentine-wheat-joins-list-plagued-by-dry-weather--2024.html
