China expected to BAN $400 million wheat imports from China

Nothing in the Australian media yet.

Exclusive | China-Australia 

relations: ban on US$400 

million Australian wheat 

imports looms

• Wheat exports from Australia are expected to join a list that already contains barley, sugar, red wine, timber, coal, lobster, copper ore and copper concentrates

• The escalation in tensions between China and Australia started after Canberra pushed for an international inquiry into the origins of the coronavirus in April

SCMP,

2 November, 2020

China is expected to ban imports of Australian wheat, putting a A$560 million (US$394 million) trade in doubt, with the grain the latest to join a list of new blocks on Australian products, according to industry sources.

From Friday, barley, sugar, red wine, timber, coal, lobster, copper ore and copper concentrates from Australia, are expected to be barred from China even if the goods have been paid for and have arrived at ports. The ban on wheat is likely to follow, although a date has not yet been set, sources said.

It is understood that Beijing will communicate the bans to all Chinese state-owned and private traders by Tuesday. Traders who have already been notified said no formal document was issued nor were reasons provided.

The bans, though, came with a warning that Australian shipments would also be turned away if traders tried to circumvent the restrictions by re-routing shipments via a third party country, sources added, with Chinese authorities set to pay particular attention to certificates of origin.

Chinese importers have been told to obey these rules strictly and suspend all orders for commercial reasons

“Chinese importers have been told to obey these rules strictly and suspend all orders for commercial reasons,” said a trade source in China familiar with the impending ban, who wished to remain anonymous due to the sensitivity of the issue.

“Shipments arriving at the port before Friday will be released, but those arriving after will stay at port. It does not matter if it is already in the bonded area.”

Chinese importers which have shipments of the first seven banned goods arriving after Friday have been told that they will have to bear the expense of any uncleared goods.

Alongside the new bans that were communicated verbally to some traders on Monday, on Friday, China also suspended imports from grain exporter Emerald Grain and ceased imports of Australian timber from Queensland due to the discovery of pests and other contamination.

This follows earlier rounds of Chinese trade actions, including anti-dumping duties on Australian barley, beef export suspensions and a new anti-dumping investigation into cheap Australian wine.

The escalation in tensions between China and Australia – that has shown no signs of abating after seven months – started after Canberra pushed for an international inquiry into the origins of the coronavirus in April, without consulting Beijing.

Australian wheat exports to China had already faced a threat in September when China customs said it would increase checks and carry out tests on shipments following the first suspension of barley imports from Australia’s largest grain exporter, CBH Group, due to the discovery of pests.

Barley is Australia’s biggest grain export to China, with Australia’s trade to China worth an average of around A$1.2 billion (US$843 million) a year.

Wheat exports to China are lower, with the value of Australian wheat exports to China having fluctuated in the past three years. It fell from around A$290 million in 2017-18 to A$32 million in 2018-19, but according to the Australian Bureau of Statistics, exports in the year to June rose to over A$560 million.

The ban on wheat would not have come as a surprise to some importers and analysts in China who have been on alert in recent months given China’s frantic buying of wheat and other grains, including corn.

Despite not being a big wheat importer, China has been accelerating its purchases with stockpiling against shortages the likely driver, analysts S&P Global Platts said in October.

China has already bought large amounts of wheat from France, Canada and Australia this year, while its wheat commitments with the United States are also near a four-year high, S&P Global Platts added.

China has also been buying from Lithuania, while Russia and Kazakhstan are potential new suppliers, according to the China National Grain and Oils Information Centre.

China is expected to continue buying grains at a faster-than-expected pace in the coming months as the country looks to meet its internal demand and ensure stable domestic reserves

The move to buy more wheat also coincided with its commitment to ramp up its US agriculture purchases as part of the phase one trade deal agreed between Beijing and Washington in January, according to Bloomberg.

China has projected it will raise its annual wheat purchases to 6 million tonnes from June, up from 4 million tonnes a year earlier, and to its highest import level since 2013-14.

“China is expected to continue buying grains at a faster-than-expected pace in the coming months as the country looks to meet its internal demand and ensure stable domestic reserves amid a backdrop of uncertain market factors like food supply scare and trade tensions,” S&P Global Platts said.

While the rapid levels of purchases have a lot to do with China’s moves to mitigate against shortages, this also sets up wheat as a potential target for a ban given its large stockpile, one analyst said. The same criteria could also be applied to China’s copper imports.

China wheat crops ruined

This is China, not Lichtenstein.

This is going to increasingly become the way as weather becomes more chaotic. Where are they going to imnport it from? Britain just lost a third of its crop due to weather events.And then there's Egypt, which until yesterday was the world's biggest buyer - but their economy's collapsing.

China may become top wheat importer after crops ruined

• Wheat crop damaged by frost and rains in northern China
• Around 20 mln tonnes of crop may have been downgraded
• China seen emerging as top buyer, overtaking Egypt
• Buyers have already booked 3 mln tonnes, close to last year

Reuters,

16 July, 2013

China's wheat crop has suffered more severely than previously thought from frost in the growing period and rain during the harvest, and import demand to compensate for the damage could see the country eclipse Egypt as the world's top buyer.

Interviews with farmers and new estimates from analysts have revealed weather damage in China's northern grain belt could have made as much as 20 million tonnes of the wheat crop, or 16 percent, unfit for human consumption. That would be double the volume previously reported as damaged.

Higher imports, which have already been revised upwards on initial damage reports, will further shrink global supplies and support prices, fuelling new worries over global food security.

The U.S. Department of Agriculture on Thursday raised its forecast for China's imports in 2013/14 to 8.5 million tonnes from 3.2 million tonnes in the previous year, prompting U.S. wheat prices to rally to more than two-week highs.

But overseas traders and analysts estimate imports could rise above 10 million tonnes, surpassing the 9 million tonnes the world's biggest buyer Egypt is expected to buy.

Competition from China for more imports would force other buyers, such as Egypt, to pay more for grains, in a new blow for the Middle East country after two years of political turmoil has left it struggling for funds to pay for food imports.

In China's top wheat producing province of Henan, farmers visited by Reuters said kernels shrunk because of the frost early this year followed by more damage with grains germinating due to the rainstorms in May. Henan is in the northern grain belt, which accounts for about half of China's output.

"The kernels this year are half their normal sizes," said Feng Ling, a 55-year old farmer in Xuchang, central Henan, where some growers have seen their production slashed by 40 percent from year ago. "The harvest was terrible."

China has already booked around 3 million tonnes of wheat for shipment in the year to June 2014, nearing last year's purchases.

That would be the biggest volume imported since the near 10 million tonnes China booked in 2003/2004 after a sharp decrease in the domestic harvest. In a normal year, China accounts for about a fifth of global wheat production and consumption.

"We expect between 15 to 20 million tonnes of wheat will be downgraded to use for animal feed, which will reduce wheat supply for milling purpose," said Li Qiang, chief analyst at agricultural consultancy, the Shanghai JC Intelligence.

The crop damage across large swathes of China's farmland is adding to concerns over global food supplies after unfavourable weather in top wheat exporters the United States and the Black Sea region resulted in quality downgrades.

"The end users have been very relaxed about the wheat supply outlook," said Abah Ofon, a commodities analyst at Standard Chartered Bank in Singapore.

"But as the season is unfolding we are seeing bumps emerge. The market now has to readjust based on the new fundamentals which suggest the demand is going to be more than what the market was expecting."

Global output is expected to rise this year from last, but will still be below demand and leave the world with the lowest wheat stocks since 2008/09.

Chinese analysts and traders see less of a shortfall than those overseas, and have smaller estimates for total wheat imports of around five million to six million tonnes.

This is because they expect limited availability of U.S. soft red winter wheat at a price at which China is interested in buying. China is also likely to draw down its stocks to meet some of the demand.

The weather impact on China's wheat crop will make it harder for Beijing to maintain self-sufficiency in grains. As cities encroaching on arable land and rising incomes drive up demand, China is finding it harder and harder to feed the world's most populous nation with domestic supply.

China has also been snapping up corn shipments in recent weeks with imports forecast to climb to an all-time high of 7 million tonnes this year, according to the USDA.

NOT FIT FOR MILLING OR STORING

Chinese farmers have traditionally relied on Beijing's annual stockpiling programme to protect their income. But the crop quality this year is so bad that even the state granaries are turning grain away.

At Xuchang city, trucks piled high with bags of wheat queued outside the state grain reserve warehouse. Several farmers looking to sell their wheat waited outside the building even though officials had rejected the stocks.

"The rains have caused the kernels to start sprouting, so the warehouse has refused to buy our wheat," said farmer Li Xiaohua, who has been waiting outside the warehouse to sell her stocks. "What can we do now."

She said her family could normally harvest about 500 kg of wheat on one mu (0.07 hectare) of land, but the volume has slumped to just 300 kg this year.

The wheat crop, hit by frost and rains in China, cannot be milled into flour and most of it will be used to feed animals.

The supply situation has been further strained, as some of the wheat in government reserves since 2009/10 is deteriorating. China does not publish data on its state reserves, but analysts said state stockpiler Sinograin still holds between 20-30 million tonnes of wheat.

SERIOUS CROP LOSSES

In addition to around 10 million tonnes of wheat being downgraded in Henan, production in Anhui, Jiangsu and Hubei provinces has also taken a hit.

The four provinces produced nearly half of the China's wheat output in 2012, with Henan accounting for 26 percent of the country's total. Analysts expect Henan's output to fall some 20 percent from last year's 32 million tonnes.

"Good-quality wheat is in a short supply," said Liu Xuepeng, a purchasing manager with a major flour mill in Zhengzhou, capital of Henan.

Millers will need to blend lower-quality wheat with high-quality domestic and imported grains to make flour, he said.

Sinograin is focusing on buying soft red winter wheat from the United States and similar varieties from France and Australia. Flour mills are keen to import high-quality Canadian and U.S. hard red winter wheat to blend for making flour for making bread and biscuits.

Higher imports of top-grade wheat by China would drive up premiums for protein-rich spring wheat traded on the Minneapolis Grain Exchange <0#MWE:> and hard red winter wheat on the Kansas City Board of Trade <0#KW:>.

Although the global wheat market was underpinned by Chinese buying last week, U.S. wheat prices are still around 9 percent below domestic prices of similar quality cited in Jiangsu province, encouraging imports.

Chinese buyers have been locking in cargoes for shipment even in the first quarter of 2014, which shows the shortfall in domestic supplies is likely to last over the next 12 months.

"The way they are buying is something very unusual," said a Singapore-based trader. "They have been signing deals for Australian new-crop wheat and other origins for shipment in the first quarter of 2014. This shows some serious problems with the crop." 

GE wheat in Oregon

Genetically Modified Wheat Isn't Supposed to Exist. So What Is It Doing in Oregon?

Businessweek,

30 May, 2013

Wheat farmers, advocates of food safety, and pretty much anyone who eats bread or noodles have turned their attention to Oregon, where a wheat farmer found a genetically engineered strain of wheat in his otherwise unmodified crop. He couldn’t kill it in any of the normal ways, so he sent it to the lab for testing, which sounds like the set-up for a farm-belt horror movie. The reality has caused alarm of a different sort: Genetically modified wheat hasn’t been approved by the Food and Drug Administration, and unlike corn and soy and other so-called GMO foods, there isn’t supposed to be any genetically modified wheat in the U.S. food supply at all.

There are two reasons to care. Food safety folks lobby hard for labeling of genetically modified foods, saying that the jury is out on the long-term health and environmental effects and consumers deserve to know what they’re buying. The companies that make the seeds say they’re perfectly safe. And for wheat farmers and exporters, this potentially cripples the export market: Many foreign buyers don’t want genetically modified wheat and can switch their buying to Russia, Ukraine, Australia, and other large exporters. Japan reacted quickly, canceling an order today for nearly 25,000 tons of wheat, Bloomberg News reported, and wheat futures dropped on the Chicago Board of Trade.

The Animal and Plant Health Inspection Service (APHIS), which is responsible for keeping unapproved GMOs out of the food supply, has begun testing the wheat. In a full-court PR press, the agency has also released a Q&A (PDF) and video to address the issue. Here are a few points to consider:

It’s probably too late to do much about this.

The U.S. has some 1,000 field trials for new gene-altered crops each year, most in multiple sites. The protocols for containing those genes are lax, argue such critics as the Center for Food Safety, which wants a moratorium on field testing of gene-altered crops. ”I would not be at all surprised if there are a number of experimental genes that have contaminated and are happily being passed along at low levels in the food supplies of various crops already, but nobody’s testing,” says Doug Gurian-Sherman, a senior scientist with the Union of Concerned Scientists in Washington. “It’s really a ‘don’t look, don’t tell’ situation. We just really don’t know.”

After all, this isn’t the first time.

In 2000, a strain of corn called StarLink, engineered by Aventis (SNY) to kill caterpillars, was found in taco shells. In 2006, Bayer’s (BAYN) LibertyLink experimental rice made its way into the food supply, leading to lost exports. In 2012, the German company agreed to pay $750 million to settle claims from 11,000 U.S. farmers in five states. Restoring genetic purity to a crop is a very expensive process and takes time.

Is there a public safety issue?

That’s a matter of debate. Regulators were quick to jump on the Oregon discovery with a battery of tests and extensive investigations that are under way now. Monsanto (MON) designed the Roundup Ready wheat to withstand its Roundup herbicide used to keep fields free of pests, and the gene isn’t considered harmful. “The U.S. Food and Drug Administration (FDA) confirmed the food and feed safety of Roundup Ready wheat more than a decade ago,” Monsanto said in a May 29 statement.

Critics of gene-altered food argue that the periodic crop discoveries highlight a regulatory system that is woefully inadequate to monitor the expansion of modified crops and to detect any dangerous genes that could materialize. “The question is why APHIS does not tighten its procedures for field trials. It’s incredibly lax, whatever APHIS may try to say,” says Bill Freese, a science policy analyst with the Center for Food Safety.

Hungary destroys crops from Monsanto's GM seeds

GM Watch,

27 May, 2013

This week about 500 acres of corn crops were burned

Redebrasilatual.com, 24 May 2013

http://www.redebrasilatual.com.br/mundo/2013/05/hungria-destroi-plantacoes-com-sementes-transgenicas-da-monsanto-517.html

[Slightly edited Google translation of Portuguese original]

Hungary decided to eliminate all plantations using GMO seeds from Monsanto. According to the Minister of Rural Development Lajos Bognar, around 500 hectares of corn crops were burned this week - equivalent to five million square meters. The intention is that the country has no produce originating from genetically modified material.

According to the information portal Real Pharmacy yesterday (23 May), the cornfields that were destroyed were scattered around the Hungarian territory and had been recently planted. Thus, poisonous corn pollen was not about to be dispersed in the air, and so there was no danger to the population.

The Hungarians were the first to take a forceful position in the European Union in relation to the use of transgenic seeds. During recent years, the government of Hungary has destroyed several plantations of crops derived from Monsanto seed. Minister Bognar says the country's producers are required to ensure they do not use genetically modified seeds.

The European Union has a policy of free movement of products within the countries of the bloc. Thus Hungarian authorities cannot investigate how the seeds reach their territory. However, said Lajos Bognar, "That does not prevent us from investigating in depth the use of these seeds in our territory."

According to the Hungarian press, the country still has thousands of similarly affected acres. Also according to the [news] portal Portugal Mundial, farmers defended themselves against the charge of using genetically modified material. They claim they did not know that the seeds were Monsanto's.

As the fertile period for plantations is already half over, it's too late to plant new seeds. Thus, this year's harvest was completely lost. And to make matters worse for farmers, the company that distributed the GM seeds went bankrupt - which prevents them from receiving compensation.

NOTE: This is not the first time Hungary has destroyed crops containing GM genes. In 2011 Hungary destroyed 1,000 acres of GM-contaminated corn.

Food derivatives

This interview comes the closes to revealing the truth on mainstream media

FREDERICK KAUFMAN: FINANCIALISED FOOD

American journalist and author, Frederick Kaufman, whose new book is Bet the Farm: How Food Stopped Being Food.

Radio New Zealand

Author Frederick Kaufman Tries To Follow The Money In Bet The Farm

A book about "how food stopped being food"

Food Republic,

8 November, 1012

One of the more gripping tales I've read in some time wasn't a potboiler thriller or the latest installment of a Swedish murder mystery, but food journalist Frederick Kaufman's attempt to find out what's behind the current and very real the food crisis. In his new book, Bet The Farm: How Food Stopped Being Food, the veteran writer and professor starts with a simple question: why can't delicious, inexpensive and healthy food be available to everyone on earth?

He starts his quest by looking at fast-food pizza, and how Domino's manages to make the same pies everywhere while keeping prices affordable. Soon, he's visiting mozzarella makers in Colorado, tomato farms in California, laboratories and CEO's offices. Kaufman becomes spellbound by the hunger problems facing the world, and this obsession propels him on what in turn is a spellbinding journey. It's sort of like Heart of Darkness, but with pepperoni.

The book is a must-read especially for anyone who has been hearing about how the commodities market has affected everything from hunger to GMO's to obesity. But I'd say the 259-pager is fascinating enough for everyone. It might even make the perfect holiday gift for a friend or family member — unless they happen to work for Monsanto. I caught up with Kaufman at downtown NYC lunch spot The Smile for sandwiches and details.

What was the green-light moment to get started on this book?
I had been writing about American food culture for Harper's for many years, and one oevening I had drinks with my editor and we couldn’t think of anything more to say about food, and so we all of the sudden realized that it was no longer about the food, it was about not enough food. It was about hunger.

You say in the book that you use the old Watergate technique: you follow the money?
I thought I had a really simple question: Why can’t there be healthy, delicious and inexpensive food for everybody on earth? Then I learned that people go hungry not because there isn’t enough food. We make more than twice the amount of food needed to feed everybody on this planet. The reason people go hungry is because they can’t afford the food. And so I switched my question to: How does food get its price?

In the process, you go into places where I’m sure you weren’t welcome like Tyson’s chicken and Domino's Pizza's mozzarella supplier?
I think every investivagative journalist knows how hard it is to get into places where it’s not necessarily in their best interest for you to be. I simply called up Domino’s and I said I’d lke to understand the anatomy of a pepperoni pizza. And they let me in. And now they’re very angry about that.

But you don’t really pin it on Domino’s?
I think I was really fair to Domino’s and to Tyson Foods. I think I gave an incredibly fair shake to the scientists involved in genetic alteration of food. I think I was very fair to the World Food Program. And I think I gave a fair shake to Wall Street, which is where I finally ended up. The funny thing is that the only people who really don’t complain are the bankers, because they know what the deal really is.

Did it ultimately end up making you feel depressed to come to these conclusions? What was your reaction?
There is value in knowledge; there is joy in understanding how it works. And when I came to finally understand how it works there was opportunity to fix the problem. So one of the problems is compassion fatigue, depression— there are real ways to stop speculation in global food and to make food delicious, inexpensive and healthy for everybody on earth.

That’s the argument against GMO’s, and yet the corporations keep suggesting that if there’s no GMO’s, the world’s going to starve. Are they being disingenuous?
You use the word "disingenuous." I would go further and I would say there is a profound depth of hypocrisy to what a company like Monsanto is up to and Bayer Agroscience and Syngenta. And the problem ultimately is one of their monopoly and intellectual property rights and proprietary technology. This is a topic that is very emotional and we can see that playing out in Proposition 37 in California right now [the measure was voted down on Tuesday]. I believe that there should be transparency but there’s something more, which is that we need to get the money out of the profit stream for Monsanto, and Cyngenta and Bayer Agroscience and Dow Agrochemical.

Have the executives at these companies been brainwashed into thinking that they're doing the right thing?
People in the industry and often people in academia are mistaking environmental sustainability for economic sustainability. This is another form of the subtitle of the book. Many of the industry players no longer think of food as food. They think of food as a spreadsheet, a legal construct, a political football or some sort of a financial derivative — a financial instrument known as a derivative. And of course Wall Street has exploited the fact that food is no longer perceived as food, and stepped right in and made windfall profits on the ever-growing price of global commodities.

Let's talk about GMOs, which also play a role in the book.
I spent a year traveling from one genetic modification laboratory to another. I saw hundreds of growouts with all sorts of different plants. I met a woman whose lifelong goal is to create a square tomato. I met a woman, Dr. Pamela Ronald, who has created a variety of rice that is resistant to the worst rice blight in Asia. These two things are not equal: if you create a square tomato that Unilever or Heinz likes [so it can] get more in a box, or if you’re creating something that could potentially have a tremendously positive effect on small farmers and on Asian rice production. So it’s kind of like saying, Science: Good or bad? And it’s dangerous to keep our thinking so narrow about such a big topic. Monsanto is a bad player, and we have to get them out of the business — Roundup Ready, the way its’ being spread and the way it's working out legally, this is bad, and we all know this. Is this a reason to stop funding throughout America, academic research in food? The scientists themselves perceive Monsanto as a bad player.

Are there any corporations that are trying to do better to help solve the problems?
I cannot speak for Monsanto, but when I’m at Tyson Foods — which in its own way is infamous for being a bad player — I met people who really belived that they were helping not only to feed the world but to save the world. I think people believe this, and I guess now that corporations are people we can say that corporations feel this way too. (I’m clearly being sarcastic.) Bill Gates believes that bringing commodities markets to Uganda and Tanzania and Guatemala will be helpful. I do not believe he’s disingenuous. I simply believe he’s wrong.

What would you recommend as far as resources? What can people do to improve the situation? Even at the dinner table?
The ultimate solution to the problem are agro-ecological farming methods and more localized food systems. But we’re not quite there yet because we’re not at a fair playing field because industrialized food and securitized food and financialized food have all the advantages that small farmers and small supply chains do not have. So how do we get to that fair playing field? Well, politics is messy. Maybe we don’t even love politics this much, but this is the path, and we should be happy that there is a path such as politics which isn’t always the case in other countries.

What about on the financial side? Your book ends up focusing on the markets...
We can try to push for position limits so that banks are limited in the amount of speculative investments they can make in global food. We can push for US strategic grain reserve, which we had up until the late 1990s, which will help stabilize the price of food.

What about the home cook who doesn’t want to spend time on politics? Can shopping at farmer's markets really do anything?
Farmers markets and good real food are essential elements of the solution. They must be encouraged and we need to grow it. However, I don’t believe that this problem can be solved simply by consumer choice. That’s’ what I came to see in this book. That’s the ultimate solution, but to make it ultimate there have to be financial reforms. 

American drought

America, Prepare For A Century Of Drought

Business Insider,

11 January, 2013

Corn and wheat prices surged today.  The immediate reason appeared to be the year-end USDA report, that showed supplies were lower than projected.

But concurrent with that report was the release of the Commerce Department's National Climate Assessment Development Advisory Committee National Climate Assessment survey.

One of the findings: we can expect up to a century of drought.

Here's a chart from the report projecting percent of the country in drought conditions in the coming years.

Commerce/NOAA

The red line is based on observed temperature and precipitation. The blue line is from the average of 19 different climate models. The gray lines in the background 

are individual results from over 70 different simulations from these models. 

The projections are derived from the Palmer Drought Severity Index, one of the 

most widely used measure of drought, the report says.

"These results suggest an increasing probability of drought over this century throughout most of the U.S.," the committee says. "Droughts have become more frequent and intense in some regions, and confidence is that these trends are projected to continue."

Wheat Futures

Wheat Futures Jump Most in Four Weeks as U.S. Export Sales Surge

Wheat rose the most in four weeks as export sales surged to the highest in almost two years in the U.S., the world’s biggest shipper. Corn and soybeans climbed.

Bloomberg,

29 December, 2012

Exporters sold 1 million metric tons of wheat in the week ended Dec. 20, the most since Jan. 13, 2011, and the fourth straight weekly increase, government data showed today. Prices have fallen 9.8 percent this month, boosting the appeal of U.S. supplies for overseas buyers, said Brian Hoops, the president of Midwest Market Solutions.

“This is something we’ve not seen from the wheat market for a while, in terms of export business,” Hoops said in a telephone interview from Springfield, Missouri. “It’s an indication we’re at a level where we’re going to stimulate demand.”

Wheat futures for March delivery climbed 0.8 percent to settle at $7.7875 a bushel at 2 p.m. on the Chicago Board of Trade, the biggest advance since Nov. 27. The price is up 19 percent this year, the largest gain among the 24 commodities tracked by the Standard & Poor’s GSCI Spot Index.

Corn futures for March delivery rose 0.4 percent to $6.94 a bushel in Chicago. The price has dropped 7.8 percent in December, heading for the largest monthly decline since May.

Soybean futures for March delivery added 0.3 percent to $14.18 a bushel on the CBOT.

Corn is the biggest U.S. crop, followed by soybeans, hay and wheat, U.S. government data show.

Unseasonal weather in Argenitna

This will put even more pressure on food prices internationally
 

Cold snap may hit Argentine wheat, rain seen ahead

* Monday's frosts do little damage, more cold seen Tuesday

* Argentina is a top world soy, corn, wheat supplier

* Buenos Aires rains cause some flooding, more showers seen

Reuters,

27 September, 2012

BUENOS AIRES, Sept 25 (Reuters) - A cold snap in grains powerhouse Argentina could cause frost damage to wheat plants as they enter key growth stages, but the outlook for soy and corn crops remains bright thanks to rains soon expected to sweep the Pampas, specialists said on Tuesday.

Expectations for ample showers related to the El Nino phenomenon are raising farmers' hopes for a bumper harvest after a dry 2011/12 season in Argentina, the world's sixth biggest wheat exporter, No. 3 soybean provider and No. 2 corn supplier.

Wheat growers, however, who finished planting their 2012/13 crops last month, will be keeping a close eye on a cold spell that began on Monday and is expected to last until Thursday.

"The thing to watch this week are the frosts," said Leonardo De Benedictis, weather expert at farm consultancy Clima Campo. "Unseasonably cold air is ... coming at a delicate time for wheat, which is in its growing stage. This can cause

difficulties, but it shouldn't be anything catastrophic," De Benedictis said.

Early morning frost was seen in parts of top farm province Buenos Aires, as well as in Santa Fe, Entre Rios and Cordoba.

"As of today, the frost has not done much damage. But when it comes back again tomorrow, it could cause some problems," De Benedictis added.

He said he sees a less-severe cold front coming to Argentina on Sunday, bringing storms to the vast Pampas grains belt.

"This will help maintain the good soil moisture that already exists in the central part of the farm belt," De Benedictis added.

The Argentine government says 3.7 million hectares of wheat were planted this year, down about 20 percent from last season. Farmers say government trade policies deter wheat sowing, and plantings have fallen in recent years. 

 

Argentine grain supply flow is of interest to exporters such as Cargill Inc, Bunge Ltd and Noble Group Ltd , which operate gigantic terminals along the Parana River, leading to the shipping lanes of the South Atlantic. 

 

An El Nino event is likely to develop this month and next, affecting global climate patterns, the World Meteorological Organization (WMO) said on Tuesday.

The phenomenon, characterized by unusually warm ocean temperatures in the tropical Pacific, tends to bring rain to Argentina's central agricultural belt while causing dryness in Australia and parts of Asia. It's opposite, La Nina, causes a

cooling of waters and makes for dry Argentine crop weather.

Heavy rains in August and this month soaked wheat plots and flooded some parts of Buenos Aires province.

"There has been flooding of varying severity in central and southeastern Buenos Aires, which has delayed some corn planting. But that is being made up for," said Tomas Parenti, an agronomist at the Rosario grains exchange. As of last week, about 5 percent of 2012/13 corn had been planted, according to the Buenos Aires Grains Exchange, with soy expected to start going into the ground next month.

"Wheat is growing well and conditions are very good for soy planting, which will start in mid-October. Conditions are set for high yields," Parenti said. "An overabundance of rain is better, in terms of farm production, than drought scenarios."

The U.S. Department of Agriculture (USDA) forecasts Argentine 2012/13 corn output at 28 million tonnes, up from last season's 21 million tonnes. Although the Argentine government has not formally estimated production, a senior official said itcould exceed 26 million tonnes.