Wheat: Argentina Wheat Market Crumbling

Although a number of crops are failing in Argentina, including corn and soy, wheat is also participating in the destructive drought that is crushing the entire agriculture sector of Argentina.

The commodity grain sector hasn't moved with the metals market, as demand for everything is down, even though people still need to eat, as well as their livestock.

This is particularly difficult for Argentina, who is one of the top exporters of grains in the world, and so depend on so much on it for the welfare of the country.

At this time things are so bad that farmers have given up trying to salvage their wheat crop, and instead are focusing on saving their cattle. Even if the cattle are saved, they will be difficult to breed because of the lack of food for them.

According to farmers in Argentina, wheat fields are as dried as they can be, with little hope of salvaging a wheat crop, as there is little to put in storage.

Unfortunately for everyone involved, the wheat planting, wheat yield and wheat harvest around the world has been huge, and so the drought in Argentina is hurting them without benefiting anyone else.

Even though farmers in the U.S. were hoping to get some of the trade usually done by Argentina with Brazil, it looks like it won't have much impact on wheat exports from the U.S., and so Argentines will be the ones to suffer.

So in spite of this, wheat futures aren't moving much because of this, although there was a slight move upward recently based on wheat news from the country. But it's not sustainable.

Weather predictions in the country are, as usual, contradictory, and so some say the drought will end with rain coming, and others say it won't amount to much. Either way, wheat farmers in Argentina, and its people, are in for a long struggle as grain prices continue to fall.

For Argentina, this is the worst year for drought and lack of rain since 1971, and even if there is a major change in the weather patterns, the wheat harvest will be way down, as wheat production grinds to a halt.

Along with the wheat crop, other crops suffering are corn and soy, with silos there to store the crops are in many cases empty or half full.

Even though soy is down, it is still on the positive side, and is projected to increase in production by 7 percent. The corn harvest will fall by about 27 percent, and wheat production will be hit the most from the poor growing season projected to plunge by 44 percent over the 2008-2009 harvesting season.

Grains are so scarce in the country, that the Argentine government is has even lowered the minimum weight requirements to slaughter cattle so the farmers can make some money off them before they are worthless or die.

It'll take some time to recover from this wheat disaster, as Argentina will suffer probably for a couple years or more trying to come back from this natural disaster.

In a normal year this would have boosted wheat prices tremendously, but the wheat harvest has been so plentiful globally, that it will easily absorb the losses without making a difference in wheat prices.