Argentina: Weather and politics unpredictable for grain market

Unfavourable conditions for Argentina's cereal production:

300 mm of rain in 10 days - El Niño weather

Cereal production by 2015/16 of Argentina stands under several adverse circumstances: El Niño weather, as well as new elections with uncertain output for future export conditions.

The wheat acreage in Argentina should have fallen back according to recent estimates of 4.4 only 3.7 million hectares. The export taxes of the State funded that his earnings are a major cause. The Argentine wheat production is already in retreat.

In the October general elections will find with unsafe output. The former President can possibly be replaced with her conservative party. A policy change with new regulations for agricultural exports would be connected. 40% of the Argentine State budget is financed by export taxes on agricultural products.

The current vegetation period July/Aug. 15 is characterized by an unusual rainfall activity in the main production areas: over 1000 mm precipitation (more than a year) and the rain strong time yet is imminent. Precipitation fell within 10 days 300 mm in the province of Buenos Aires. This has led to flooding and devastation in the wheat fields. It expects currently at least 6% total losses. High humidity promotes also yield-damaging fungus growth on the cereal crops in the remainder of the earnings.

That was expected wheat harvest in the months November and December 2015 until recently still on 11.1 million tonnes (previous year 12.5 million tonnes) estimated. After the recent events, the result could be lower.

Argentina's wheat exporter by about 6 million tonnes per year. The main area is the neighboring Brazil. 2013 already succeeded to deliver not the required wheat because a frosts partially destroyed the stocks. The United States helped out with 4 million tonnes of wheat.  

The unpredictable weather conditions should be considered possibly as harbingers of the El Niño weather phenomenon. While drying occurs in the Pacific region, the South-Eastern South America receives extremely high amounts of precipitation, which may cause damage to flooding, among others. This year 2015/16, an intense EL is to enter Niño weather that should extend into 2016 in the spring. The measurement results of the Australian Weather Office provided that in any case.

Maize cultivation in Argentina is increasing over the years. As the second largest exporter of corn, Argentina plays a significant role in the international trade of corn with 15 million tonnes. The months of September/October are the peak times for cultivation. Harvests take place in the months of March/Apr/May-16.  Flooded fields may lead to loading and preventions of timely order. The further the Argentine corn year prospects are very uncertain. El Niño weather years are unpredictable.

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