Argentine officials raised the bar on hopes for domestic wheat sowings this year, pegging them at a nine-year high, despite the heavy rains which prompted an, effective, downgrade to soybean harvest hopes.

Argentina's farm ministry, in its first forecasts for domestic wheat plantings for the 2016-17 harvest, pegged seedings at 5.30m hectares.

That would represent the highest figure since 2007 for the country - a major wheat exporter, in particular to neighbouring Brazil - besides being well above the 4.37m hectares planted last year, when the country achieved an 11.3m tonne harvest, according to official data.

The forecast also represents the highest yet for sowings � albeit in an Argentine wheat data set on which commentators' estimates have a history of marked divergence, even on  historical harvests.

The Buenos Aires grains exchange overnight, in its first estimate for sowings, pegged plantings at 4.50m hectares, while the International Grains Council has forecast area, on a harvested basis, at 5.2m hectares, and the US Department of Agriculture at 4.8m hectares.

Nonetheless, all observers agree that Argentine wheat sowings will be markedly higher this year, encouraged by the boost to profitability prospects from reforms introduced by the government of President Mauricio Macri since he took office in December.

Besides ditching restrictions on wheat export volumes, the government has also scrapped export levies on the grain, besides allowing a sharp devaluation in the peso � all measures which have boosted margin prospects for domestic growers.

Soybean damage

Indeed, the Argentine agriculture ministry said its forecast of higher wheat sowings reflected the "economic improvement" for the industry prompted by "current marketing conditions", beside agronomic imperatives.

The forecast came despite the heavy rains which have dented soybean production prospects, and indeed delayed harvesting of the oilseed, meaning that fields due for wheat sowing are tied up later than normal with standing crop.

The ministry, while sticking with its headline forecast of a 57.6m-tonne soybean harvest, flagged the losses to quality from the heavy rains, through factors such as sprouted grain.

These losses will "equal a likely additional loss of 1.6m tonnes" in production terms.

Corn upgrade

However, the ministry was more upbeat on corn production prospects, saying that quality losses to the poor weather were "not widespread", while yields from the ongoing, rain-delayed harvest "remain at high levels".

The forecast for Argentina corn production in 2015-16 was lifted by 900,000 tonnes to 37.9m tonnes.

According to the Buenos Aires grains exchange, Argentine farmers have harvested only 28.3% of their corn, well below typical levels of more than 60% by now.

For soybeans, harvest is 61.1% completed � a delay equivalent to 26.4 points year on year.

'Presence of flooding'

On wheat, the exchange also said that the wet weather had got sowings off to a slow start, with 1.7% of plantings completed so far, 1.1 points behind the year-ago pace.

The knock-on effects of the slow soybean harvest, difficulty in accessing fields and "the presence of flooding in low-lying areas delay wheat planting", the exchange said.

Still, water excesses are recorded in much of the centre of the country, the intention of planting wheat remains".