Estimated size of Argentina’s corn crop grows

Estimates of Argentinas corn production continue to grow due to favorable weather across the countrys production belt.

In its first official forecast of the growing season, Argentinas agriculture ministry pegged 2009-2010 corn production in a range from 19 to 21 million metric tons, compared with USDAs recent estimate of 17.2 million.

Production is expected to be up 45% to 60% from last years drought-shortened crop despite a 7% drop in corn plantings. Yields are expected to approach the record levels of 2006-2007.

This crop forecast suggests there is potential for Argentinas ag ministry to raise the cap on 2010-2011 corn exports from the level of 10 million metric tons announced last week.

Argentina is currently expected to use 7 million tons of corn domestically, so with a 20-million ton crop, it could possibly export up to 12 million tons.

Demand for South American corn appears to be strong due partly to the low quality of the 2009 U.S. corn crop.

Japanese buyers will still buy most of their corn from the U.S., but have reportedly already booked 300,000 metric tons of South American corn.

There are ideas they could buy up to 1 million tons in 2010, which would be the most in at least a decade.