August 15, 2017 / 8:53 PM / 2 years ago

Argentina corn area to reach second consecutive record

BUENOS AIRES (Reuters) - Argentina’s corn area will expand to a record of more than 5 million hectares in the 2017/18 season, which starts planting in September, thanks to favorable climate conditions and attractive margins, analysts said on Tuesday.

A corn field is seen at the town of Estacion Islas in Buenos Aires province, November 25, 2012. REUTERS/Enrique Marcarian

They said area planted would likely grow between 5 percent and 10 percent from a year ago. Corn planting has been on the rise since last year, after President Mauricio Macri’s governments eliminated export taxes and restrictions.

Corn has a higher production cost than soy, Argentina’s main cash crop, but the analysts said it is currently a better bet because soybean prices are falling due to a large U.S. crop.

“Today corn is more profitable than soy,” said Pablo Adreani, director of the Agripac consultancy, which predicts corn area of 5.3 million hectares, up from 4.8 million hectares a year earlier.

That could lead to a record crop of 46 million tonnes, above the 40 million tonnes from the 2016/17 season, which is still being harvested, he said.

Ample rainfall in many areas in July could also favor corn planting. Luis Urriza, the government’s undersecretary of agriculture, said some of the 400,000 hectares that could not be planted with wheat could be sowed with corn.

“Our expectation is that up to 5 percent more will be planted,” he said.

Corn has an advantage over wheat in that its planting window is very long, between September and February in Argentina, giving producers a wide margin to avoid risk in case of adverse weather.

“According to the producers we have contact with, in general when planting decisions were made corn increased,” said Diego Heinrich, vice president of Maizar, the chamber that represents the cereal’s commercial chain.

Sales of fertilizer will grow 8 percent year on year to 3.9 million tonnes in 2017, Fertilizar, an agrochemical industry group, said last week.

“We have to aim to continue improving yields,” Urriza said.

Writing by Caroline Stauffer; Editing by Steve Orlofsky

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