Argentina's 2012/13 wheat area is expected to shrink 13 percent from last season, a leading grains exchange said while analysts warned that the harvest will come in well under the previous season's crop.
The South American country is an important global wheat exporter and the main supplier to neighboring Brazil, but growers say low prices in the local market have discouraged them from sowing the grain.
They blame the depressed prices on export quotas imposed by the government to help guarantee plentiful domestic supplies, and say reforms this year have failed to improve the situation.
The Buenos Aires Grains Exchange said it expected 4.0 million hectares (9.9 million acres) to be seeded with wheat in the new season, down from 4.6 million hectares in the 2011/12 crop year, when the harvest came in at 13.4 million tonnes.
That would be the second-smallest wheat area in 12 years, the exchange said in its weekly crop report.
"Sowing intention is low because farmers have been discouraged by the current price in the market and the difficulties that they've faced in the last few seasons," it said, adding that plantings had begun in far-northern and southern growing areas.
Local analysts consulted by Reuters said the 2012/13 wheat crop will be between 12 million and 13 million tonnes, compared with the 13.4 million tonnes that the government says was collected in the 2011/12 growing year.
"Under the government's anti-export policies, the prices that farmers have received on the local market are $50 per tonne lower than what they would get on the parallel export market," said Pablo Adreani, head of Buenos Aires consultancy Agripac.
Reforms to the country's export rules have failed to revive interest among wheat growers while worries mount that faltering quality, is costing the world's sixth biggest wheat exporter its competitiveness. Algeria rejected an offer of Argentina wheat last month.
The exchange held its last weekly forecast for 2011/12 soy production at 41 million tonnes and its outlook for corn output at 19.8 million tonnes.
Argentina is the world's top provider of soybean oil and meal and the second-biggest corn exporter after the United States.
Separately, the Rosario grains exchange said on Thursday that Argentina's 2011/12 soy output was expected to fall to 40.9 million tonnes, down from last month's estimate for 43.1 million tonnes, due to poor yields caused by a December-January drought.
It also cut its outlook for 2011/12 corn production to 19.0 million tonnes from 19.8 million tonnes in April.
Both soy and corn were affected by a six-week dry spell that hit just as some plants were flowing at the height of the Southern Hemisphere summer.