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Argentina corn crop stable despite drought

03/13/2012 @ 8:20am

Argentina's 2012 corn output will likely total 21.5 million-22 million metric tons, little changed from 2011, a senior Buenos Aires-based trading executive said Tuesday.

The country's corn output prospects are being closely tracked worldwide as it is the world's second-biggest exporter after the U.S.

Due to dry weather, farmers planted some varieties of corn later than usual this year and they have generated above-average yields, Freddy Pranteda, Cosur SA's director for grains and oilseeds, said ahead of an international grains conference here.

Global commodity trading company Cosur has large exposure to South American grains.

Output has jumped outside the main corn-growing region, largely offsetting declines elsewhere. Argentina produced 21.6 million tons of corn last year.

Last week, the Buenos Aires Cereals Exchange said drought damage to Argentina's corn crop was 500,000 tons more than expected, and production is expected to reach just 20.8 million tons.

"Some analysts are even forecasting less than 19 million tons but such projections are too pessimistic," Pranteda said. Recent rains were beneficial to the late plantings of corn, providing moisture at a critical juncture of crop development, which revived output prospects.

Output could have been higher but for the La Nina weather phenomenon, which caused a long dry spell.

The dry spell was more damaging for soybeans than corn and production has declined to 46 million-46.5 million tons from 49.7 million tons in 2011, he said, adding that this may drag down exports by 29% to 7.5 million tons.

Despite weather-related woes, Argentina has already sold around 5 million tons of soybeans and 7 million tons of corn from the new crop ahead of the 2012 harvest, which will gather momentum next month.

At least 4.5 million tons of new-crop soybeans have been sold to China alone, Pranteda said.

Most of the soybean sales are for April-June shipment, while corn shipments are for March-May, with a small volume for June shipment.

The sales were made at a wide price range, but late last week Argentina's new-crop corn and soybeans for June shipment were offered free on board at premiums of 38 cents and 65 cents to July CBOT contracts, respectively.

The government initially issued licenses for exports of 7.5 million tons of corn, but if permitted, exporters will try to ship out another 3.0 million tons, Pranteda said.


-By Sameer Mohindru, Dow Jones Newswires; +(65) 6415-4085; sameer.mohindru@dowjones.com
(END) Dow Jones Newswires
March 13, 2012 06:07 ET (10:07 GMT)
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