Bumper wheat harvest may ignite Argentina economy

A record wheat harvest expected in Argentina this year could arrive just in time to jumpstart the ailing South American economy in the fourth quarter, after growth has been hit by low investment, high inflation and a soy crop devastated by drought, reports Reuters.

Farmers are rushing to plant wheat in the moist conditions left by rainstorms that helped destroy Argentina's recently-harvested soy bean crop. Months of dry weather gave way in April to three weeks of storms that helped cut the crop to about 35 million tonnes from original estimates of 55 million.

The deluge sealed the fate of the 2017/18 soy season but the humidity left behind set the stage for an increase in 2018/19 wheat planting.

The Rosario Grains Exchange forecasts a record 20 million ton harvest, topping the current record 18.2 million tonnes collected in 2016/17.

With sowing set to end next month, the exchange estimates the area planted with wheat will rise by 7.0 per cent this year across the country to 6.1 million hectares as farmers seek to capitalize on good growing conditions.

"We need money after the drought and wheat prices are high. Planting conditions are good, so that's what's happening," said Pedro Vigneau, a grower in central Buenos Aires province, where he said farms are increasing wheat sowing by up to 30 per cent from the previous season.

The bumper wheat crop comes as several suppliers around the world - including Germany, France and top exporter Russia - have seen their harvests cut by bad weather, sending expected global end-of-season stocks lower for the first time in six years.

Benchmark Chicago Board of Trade wheat futures Wc1 have rallied nearly 7 per cent over the past six trading sessions after the US Department of Agriculture on July 12 cut its crop forecasts for the European Union and the Black Sea region.