Argentina will harvest 55 million tonnes of soya this season, the Buenos Aires Grains Exchange said on Thursday, citing high yields as it raised its previous forecast a day after the Rosario exchange also increased its estimate for the crop. Mild weather for the Pampas farm belt over the last month has pumped yields to higher-than-expected levels as growers bring in the crop. An ample harvest of soya, Argentina's main cash crop, would help bring in export tax revenue needed by the government to cut its fiscal deficit.
"Soya harvesting got a great boost over recent days and continues to surprise with high yields," the Buenos Aires exchange said in its weekly report. Its previous harvest estimate was 53 million tonnes. The Rosario grains exchange on Wednesday raised its soya output estimate to 56 million tonnes from 54 million tonnes.
A bigger 2018/19 crop would be good news for Argentina's key farm sector after last year's harvest was battered by drought. "The weather has been good. It's been calm over the last month and it looks like it will stay that way through next week," said Buenos Aires-based agro-climatologist Eduardo Sierra. "A 56 million tonne crop is perfectly possible."
There were concerns this year's harvest might be slowed or reduced by rain. But temperate weather has boosted yields. "The harvest is going particularly well. We have brought in 500 hectares (1,236 acres) of soya with an average yield of 5 tonnes a hectare," Francisco Santillan, a grower in the Pampas farm belt community of Pergamino, told Reuters. The two exchanges expect corn crops this season of 46 to 48 million tonnes.
The Buenos Aires exchange has meanwhile forecast a record 2019/20 wheat crop of 20.6 million tonnes. Argentine wheat is planted in June and July, with harvesting in December and January. Corn harvesting usually goes through June and the soya crop should be in by the end of May. Bumper harvests could help bolster Argentina's embattled President Mauricio Macri, who is trying to revive economic growth and defend a peso currency buffeted by uncertainty ahead of his October re-election bid.
Pressured by the weak peso and doubts about the government's ability to honor its dollar-denominated bonds, Macri last year signed a $56 billion standby financing agreement with the International Monetary Fund requiring Argentina to erase its primary fiscal deficit. He cannot do that without strong farm sector export tax revenue.