The USDA forecast wheat production in Uruguay in 2019-20 at 825,000 tonnes, up 11% from 2018-19 and the highest projected output since 2015-16. According to the USDA, area harvested to wheat is projected to increase to 250,000 hectares in the coming year, up from 200,000 in 2018-19 and compared with 197,000 in 2017-18.

“Factors supporting additional acreage include the current high soil moisture content, availability of quality seed, need for winter crop cover rotations and weed control,” the USDA noted. “Wheat followed by double cropping with soybeans has been, in general, a positive economic decision in the past, delivering higher margins than alternative crops.

“Nevertheless, wheat farmers are sensitive to price signals so the recent drop in global wheat prices may deter some area expansion. Another factor influencing planting decisions is the El Niño weather pattern, which has brought more rain than usual recently and which could impact future planting which begins in May 2019.”

The USDA noted that domestic consumption of wheat in Uruguay is “very stable,” with three large flour mills accounting for approximately 90% of the market.

Wheat exports, meanwhile, are forecast at 320,000 tonnes in 2019-20, unchanged from 2018-19.

“Brokers indicate that 270,000 tonnes of wheat of the MY 2018-19 season were already committed for export and that an additional 30,000 to 50,000 tonnes could be shipped before May when the soybean harvest begins to fill the ports,” the USDA said. “After July, some smaller volumes could be trucked to Brazil. During December 2018-February 2019, Uruguay exported six boatloads of wheat. Most of it went to Algeria and Indonesia. Smaller volumes were exported to Brazil.”