Nov 01, 2022
Argentina's Wheat Production Declines, Exports May be Curtailed
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
The estimates for the 2022 wheat crop in Argentina continue to decline due to dry conditions, cool weather, and even frosts. Rains last week in central and southern Buenos Aires improved the moisture situation for the wheat, but that area only accounts for approximately 27% of Argentina's wheat.
Everything that could go wrong for the wheat did go wrong including dry weather, early frost, and late frost. Production estimates continue to decline and many estimates are now in the range of 13-15 million tons and dropping.
It is entirely possible the Argentine government will limit the amount of wheat exports to help insure adequate domestic supplies. They have done this in the past with other agricultural commodities (corn, wheat, and beef) and they would not hesitate to limit wheat exports.
If Argentina limits wheat exports, it will impact Brazil, which is Argentina's largest foreign customer. Brazil may have to look to the U.S., Canada, or Russia for their needed wheat imports. Buying from any of those other countries would increase the cost of wheat because they are outside of Mercosul and there would be additional transportation costs.