South America Calling

Heavy rains over the last two weeks could generate substantial losses to Argentina's 2014-15 wheat crop, the Buenos Aires Cereals Exchange warned.

The true extent of the damage will only become clear once the floodwater subsides but the exchange has already lowered its wheat area view by 250,000 acres on the inundations and more rain is forecast for this week.

Rainfall was concentrated in Buenos Aires, the country's principle wheat province, with the worst hit areas in central and southeastern districts like Loberia, Miramar and Mar del Plata.

These districts account for 18% of the country's planted area of approximately 10 million acres and therefore loss potential is extremely high, said the exchange.

Not only has the moisture damaged wheat in the ground, it has also made fertilization efforts impossible.

Argentine farmers moved back to wheat this year as planting conditions were good and the cereal offers the chance to generate cash at the end of the year, which is useful at times of high inflation and economic uncertainty.

Despite cutting its forecast, the Buenos Aires exchange still sees planting 13.2% higher than the season before.

The U.S. Department of Agriculture forecasts Argentina will produce 12.5 million metric tons of wheat in 2014-15, up 19% on the year before.

(AG)

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