Array())
-->
Argentina's wheat area will expand to more than 4 million hectares this year from 3.6 million in the previous season, thanks to good sowing conditions and farmers' growing need to rotate crops after years of over-planting soy. The political crisis in Ukraine is contributing to the push to plant more wheat by supporting prices.
Indeed the price of Argentine wheat at port for export is currently $370 per tonne, up from $270 a year ago. Ukraine and Argentina are both significant wheat producers. Seeding for Argentina's 2014/15 season started this month and goes through the height of the South American winter in July.
Soils have been primed by the 200 millimetres of rain that has fallen on the Pampas grains belt this year, up from the normal year-to-date level of 119 millimetres. The Rural Society of Argentina (SRA), which represents big farms, expects about 4.1 million hectares of wheat to be planted. SRA chief economist Ernesto Ambrosetti cited the need for crop rotation after years of heavy soybean planting as the main reason for this year's projected increase in wheat. "Growers know they need to increase rotation to ensure the sustainable productivity of their land," he said.
Argentina's three main crops are soy, corn and wheat. The latter two are restricted by export quotas that increase the risk that farmers might not have a market for corn and wheat. This has induced an increase in soy plantings and raised concern that lack of crop rotation will wreck Argentine soils. Buenos Aires grower Santiago del Solar said he will increase wheat planting 20 percent this year.
"Over the last few years we pushed soy planting to the limit. We have to sow more wheat and corn at this point for environmental reasons," del Solar said. From 1996 to 2006, the country grew about 6 million hectares of wheat per season. Then, in a bid to control domestic bread prices, the government started curbing wheat exports. Argentina needs 6.5 million tonnes each year to satisfy domestic demand.
The Argentine agriculture ministry issued its first 2014/15 wheat area estimate on Thursday, forecasting 4.5 million hectares. The Buenos Aires Grains Exchange had already increased its view to 4.3 million hectares from 4.1 million, citing high prices and ample availability of seeds and ground moisture. Argentine wheat harvesting comes in December and January.
Copyright Reuters, 2014