Argentina Ends Corn, Wheat Export Ban as Crops Shrink

Argentina, once the world’s second- largest corn exporter, lifted a ban on overseas shipments of the grain and wheat, making good on a pledge by President Cristina Fernandez de Kirchner as planting shrinks.

The removal of restrictions will apply to exporters who commit to supplying the domestic market to help meet targets set by the government, Argentina’s export controls office said in a statement yesterday. The agency, known as Oncca, said the target for domestic wheat supply in the current season was set at 6.5 million metric tons and for corn at 8 million tons.

Argentina is sowing its smallest corn crop in two decades and wheat sowing plunged 40 percent after the ban discouraged planting, adding to the strain of falling prices and drought. The country is set to fall behind Brazil, becoming the world’s third-largest corn exporter, the U.S. Department of Agriculture said.

“The decision marks a change in the government’s mindset,” Martin Fraguio, executive director of corn growers association Maizar, said in a telephone interview from Buenos Aires. “It shows that transparency in market rules is always important.”

Corn futures in Chicago have declined 16 percent this year and wheat contracts have tumbled 26 percent.

The resumption of exports from Argentina may help push prices further down, Shawn McCambridge, a senior grain analyst for Prudential Bache Commodities LLC in Chicago, said in a telephone interview.

Smaller Crops

“Psychologically, bringing in an exporter like Argentina will have an influence on the markets,” McCambridge said.

Corn futures for December delivery fell 1 percent to $3.405 a bushel in Chicago today. Wheat dropped 1 percent to $4.5275 a bushel.

Argentine growers are sowing 1.88 million hectares (4.6 million acres) of corn, the least since 1989, the Buenos Aires Cereals Exchange said last month.

Wheat farmers this year planted 2.75 million hectares of the grain, down from 4.6 million last year, the exchange said in August.

The corn planting season runs from August through December, while harvesting starts in February and goes through August. Wheat is planted from April until the end of September and harvesting starts in October and runs through January.

Before today, Oncca hasn’t allowed any corn exports since June 24, according to its Web site. The export registry remained shut for more than 90 percent of the past year, Fraguio said in an interview last month.

Bloomberg