South America Calling

Argentine corn planting will decline 3% to 8.8 million acres in the upcoming season, the Buenos Aires Cereal Exchange said late Thursday.

Farmers are switching to soybeans, which are seen as a better bet amid the instability in the economy and uncertainty over local farm policy.

However, area may decline further if dry weather persists across the corn belt.

With only a week to go before planting begins, the key farming regions of Buenos Aires, Cordoba and Santa Fe provinces remain dry, with little or no rain registered in August, and consistent rain is only forecast for the end of the month.

That's not a disaster, and long-term models indicate healthy precipitation during the October-February period, but the later first-crop corn is planted, the lower the yields and greater the risk of damage during dry spells that are so typical in January.

As a result, if farmers have to wait till October to plant, they may plump for the economically and agronomically safer option of soybeans.

The bulk of Argentina's first-crop corn is planted between Sept. 15 and Oct. 15.

Last year Argentina produced 24.8 million metric tons (mmt) of corn in 2012-13, according to the exchange, and is typically the world's No. 3 exporter. The exchange has not issued a production forecast for this year, but the U.S. Department of Agriculture estimates output at 27 mmt.

Argentina has started exporting corn to China, but government policy, which restricts exports through a licensing system, gives farmers little incentive to plant more cereal.

(AG)

© Copyright 2013 DTN/The Progressive Farmer. All rights reserved.