Despite the uncertainties arising from government intervention, the Buenos Aires Grain Exchange estimates that the area under corn will increase by 9% in the current sowing season, which is well underway.

Among the key reasons for this is good soil moisture in the Corn Belt, making sowing conditions ideal and the increase in world corn prices.

And last year, soybean yields in some areas were affected by the fungal disease frogeye, so in these areas corn was a better crop. “Also there is optimism that export taxes for corn may be reduced,” explains Hughes.

Armando Mastrangelo of Buenos Aires grain brokers, NARI Cereales says “the excellent yields last year and the need to plant corn for crop rotation purposes” are other factors behind the increase.

Mastrangelo predicts, “that although average yields are unlikely to be as high as last year, production could still reach 23-24 million tons (U.S.), higher than last year’s 22.3 million.”

Should Argentine corn production stabilize or increase, Argentine exports would continue to eat into U.S. exports and potentially drive down prices for U.S. growers.