Argentina's wheat production has experienced a significant increase in recent campaigns, with the possibility of reaching between 12.5 and 14.0 million tons in the current season. This growth represents good news for the country's farmers, who will benefit from a significant flow of income until the next harvest of corn and soybeans. Additionally, there are 2 million tons that have not yet been exported from the last two campaigns, which could increase the total volume available for export.
It is expected that during the December to February quarter, at least 6 million tons of wheat will be exported, generating foreign exchange of around US$1.5 billion. This foreign exchange would be crucial to boost the liquidity of Argentina's reserves at an opportune time. The success of these exports will largely depend on producers' willingness to sell their wheat, taking advantage of the gap between the export dollar and the financial dollar to protect the value of their income in foreign currency.
Recent rains in October have improved the wheat production outlook in the Pampean region, raising harvest estimates to a range of between 18 and 19.5 million tons. This increase in production will not only benefit local producers, with an estimated income of between US$3.8 billion and US$4.1 billion, but will also boost exports during the golden quarter from December to February.
By producing wheat out of season with the Northern Hemisphere, Argentina becomes a major global supplier of wheat during this quarter. It is estimated that between 40% and 60% of Argentina's wheat exports take place during this period, with Brazil as one of the main destinations. Considering that domestic wheat consumption is approximately 7.5 million tons, it is projected that the exportable balance for this campaign will reach between 10.5 and 12.0 million tons.
