Argentina was already making a name for itself in the grain market, but this is now also clearly reflected in the monthly figures from the US Department of Agriculture (USDA). Compared to a month ago, the export forecast for wheat from Argentina has been increased by 2 million tons.
Argentina's higher export forecast is the biggest adjustment in the new Wasde report released Tuesday evening. This isn't unexpected, as Argentina has been frequently blamed for price pressure in the grain trade in recent weeks.
Argentina isn't normally a high-flyer in wheat exports, especially compared to the major powers Russia, Ukraine, Australia, Canada, and the European Union. This season, however, the country is certainly edging its way into the fold.
A record harvest means Argentina is on par with Ukraine. In the new Wasde report, the USDA raises Argentina's export forecast to 18 million tons. This makes Argentina a more important exporter this season than Ukraine, whose wheat exports are expected to fall to around 14 million tons.
Competitive prices
The USDA is raising its export forecast for Argentina based on large deliveries in December and January at very competitive export prices. Compared to the January report, the export forecast has been increased by 2 million tons. This means Argentina is the largest contributor to the export figure revision; according to the USDA, global trade is expected to increase by 2,2 million tons to 222,0 million tons compared to January.
Wheat exports from Canada will increase by 1 million tons to 29 million tons. Developments in the European Union are estimated to be lower; EU exports will be reduced from 32,5 to 31,5 million tons.
Record harvest of almost 28 million tons
Argentina's wheat production has risen to a record 27,8 million tons. This represents a 50% increase compared to last season, and the difference from the previous year, when 15,8 million tons were harvested, is even greater.
It has been known for some time that Argentina's harvest will be large this season. The figures in the Wasde report were significantly increased monthly; in September, the USDA was still targeting a harvest of 19,5 million tons. Substantial increases were implemented monthly thereafter.
Compared to January, the upward revision remains limited to 0,3 million tons. Furthermore, there are hardly any changes in the wheat production figures in the Wasde report this month. The USDA only notes that harvest forecasts in Turkey and Mongolia have been lowered. As a result, the global harvest forecast is slightly lower than 842 million tons. Last month, the forecast was just above this level.