With the Northern Hemisphere wheat crop harvested, attention shifted south of the equator, where Australian wheat producers were expected to harvest a large but far from record crop while drought was limiting production prospects in Argentina for the second consecutive year.

The U.S. Department of Agriculture projected Australian wheat production in 2009-10 at 23.5 million tonnes, up 2 million tonnes from 2008-09. It would be the largest Australian crop since 25.2 million tonnes in 2005-06 and compared with the nation’s recent five-year average outturn of 18.6 million tonnes. It should be noted two of Australia’s past five crops (2006-07 and 2007-08) were sharply reduced by drought. This year’s harvest was just under way.

Because of the anticipated large crop, Australia was expected to play a larger role in world wheat markets this marketing year. The U.S.D.A. projected Australia’s 2009-10 wheat exports at 15.5 million tonnes, up 0.7 million tonne from 2008-09 and more than double the 2007-08 outgo of 7.5 million tonnes.

In Argentina, the picture was altogether different. The International Grains Council indicated severe drought reduced wheat plantings in Argentina by 40% from the previous year to 2.8 million hectares. It was the smallest area planted to wheat in that country since 1951.

As a consequence, the U.S.D.A. projected wheat production in Argentina in 2009-10 at 8 million tonnes, down 0.4 million tonne from 2008-09, also a drought year, and the lowest for the country since 7.8 million tonnes were harvested in 1980-81. The I.G.C. projected this year’s Argentine crop even lower at 7.6 million tonnes.

Argentina’s smaller crop translated into a low forecast for that country’s wheat exports in 2009-10. The U.S.D.A. projected Argentina’s wheat exports in 2009-10 at 2.5 million tonnes, down from 6 million tonnes in 2008-09 and 11.2 million tonnes in 2007-08. It would be Argentina’s lowest wheat outgo since 1.78 million tonnes in 1977-78.

Limited exportable supplies in Argentina were expected to widen marketing opportunities for U.S. and Canadian wheat in South America, particularly in Brazil, which typically procures around three-fourths of its wheat import needs from Argentina.

Brazil produces wheat but is unable to satisfy the needs of its burgeoning population. Brazilian wheat production in 2009-10 was projected at 4.5 million tonnes, down from the record outturn of 6 million tonnes in 2008-09 and compared with the recent five-year average production of 4.6 million tonnes. The Brazilian wheat harvest was just under way. Brazil was forecast to consume 11.4 million tonnes of wheat in 2009-10 and require 6.5 million tonnes of wheat imports.

In addition to buying more wheat from Canada and the United States, Brazil was expected to import larger volumes of wheat from another neighbor, Uruguay, where wheat production has grown rapidly in the past few years. The U.S.D.A. projected Uruguay’s 2009-10 wheat production at a record 1.6 million tonnes, up 19% from 1.4 million tonnes in 2008-09 and more than double the 2007-08 outturn of 0.8 million tonne. The U.S.D.A. projected Uruguayan wheat exports in 2009-10 at a record 1.2 million tonnes, up from 1.1 million tonnes in the previous year and compared with 0.4 million tonne in 2007-08.