Saturday, June 6, 2009

The Debts of the Spenders: Argentina Wheat Planting Slowed by Drought

Argentina Wheat Planting Stalled On Drought - Ag Secy

Despite moderate rainfall over the past week, conditions are still too dry for farmers to make much progress on wheat planting, the Agriculture Secretariat said in its weekly crop report Friday.

“The rainfall continues to be insufficient to reverse the moisture deficit across most of the Pampas and to ensure planting,” the Secretariat said.

The Secretariat has not estimated wheat planting yet, but there are many signs that the area planting will plunge this season. According to the Buenos Aires Cereal’s Exchange, Argentina’s 2009-10 wheat planting will fall to just 3.2 million hectares (7.9 million acres), down 30% on
the year and the smallest amount planted since records have been kept.

With soil moisture levels still low despite recent rainfall, planted area may fall even further than the current estimate, the exchange said. In addition to the dryness, farmers are hesitant to plant the crop due to low prices because of government intervention in wheat markets, according to the exchange.

Farmers also face high financing costs and the economic strain caused by losses to the 2008-09 soy and corn crops due to drought.

Source: CME News For Tomorrow
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