Argentina’s Wheat Harvest Could Hit Record High If Tax Cuts Extended

Key Forecast:

• 🌾 Current Estimate: 20.5M metric tons (2nd-largest ever, just below 2021/22’s 22.4M tons).
• 🚀 Potential Record: Forecast could rise further if Milei’s government extends 9.5% export tax cut (vs. 12% pre-January rate).

Why It Matters:

1. Global Supply Boost:
   • Argentina is a top-5 wheat exporter; bigger harvest could ease Black Sea supply fears.
   • Tax cuts + peso devaluation (10% drop Monday) incentivize farmers to sell.
2. Milei’s Dilemma:
   • Farmers demand tax relief extension, but government insists cuts expire June 30.
   • Dollar crunch pressures Argentina to maximize grain exports.
3. Market Impact:
   • Competitive Argentine wheat may cap global price rallies, especially if EU/Russia face weather risks.

What’s Next?

• Tax Cut Decision: Lobbying intensifies; extension could push harvest past 22M tons.
• Peso Volatility: Free-floating currency may further boost export competitiveness.
• Farmer Sentiment: “Glass half full” optimism hinges on long-term tax reform.