Argentine Drought Reduces Wheat Production to 5-Year Low

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Dry conditions brought on by La Niña have reduced Argentina’s wheat crop. Argentina’s wheat harvest is estimated at 16.7 million tonnes versus 19.8 million tonnes last year, a 16% decline, according to the Rosario Grains Exchange. The estimate suggests this year’s wheat production in Argentina will be the lowest in five years. 

A prolonged drought since the middle of this year has caused major losses in wheat acreage in large parts of Argentina’s agricultural heartland. Conditions in Cordoba, La Pampa, and Entre Rios continue to worsen, with significant amounts of area under stress. Currently, 27% of Cordoba is experiencing exceptional drought, while 23% of La Pampa’s districts are experiencing moderate drought, and 41% of Entre Rios is abnormally dry, according to Gro's Global Drought Index.  

Click here to view Gro's Drought Index for Argentina

Argentina is a major producer of wheat and a major global exporter, and Argentine exports are particularly important to Brazil. Argentina’s wheat crop is starting to mature, with harvest  beginning in December and finishing in early January. 

The global market for wheat is not being driven by the same fundamentals currently driving the markets for corn and soybeans. Major wheat exporters are almost evenly split between shortfall and surplus. Ukraine, the European Union, and Argentina are experiencing low harvests and have seen exports drop, while Russia, Australia, and Canada have supplies and exports at multiyear highs. The continuing drought in South America will support wheat prices as commodity prices remain bid.  

This insight was powered by the Gro platform, which enables better and faster decisions about factors affecting the entire global agricultural ecosystem. Gro organizes over 40,000 datasets from sources around the world into a unified ontology, which allows users to derive valuable insights such as this one. You can explore the data available on Gro with a free account, or please get in touch if you would like to learn more about a specific crop, region, or business issue.

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