There are batches with very low yields that would affect the final production. The precipitations of the last days arrived very late for the crop.
It rained but very late, both for corn and soybeans in the core zone, the most affected by the drought. According to the latest survey of the Grain Exchange of Buenos Aires, during the last week the oilseed harvest but with very low yields that could lead to total production below 25 million tons that the entity had raised. This harvest volume could be adjusted downwards in a very short time, and even in the sector they are already anticipating that some 20 million tons will be missing as a result of the lack of rainfall and that is why the milling industry will have to import some 10 million tons to meet the demands of foreign customers.
“Rains registered during the last seven days put a brake on the deterioration of late sowings and delay the advance of the harvesters in fields of prime soybeans on the center of the agricultural area. We maintain our estimate of production of million tons, a drop of 44 .4% compared to the average of the last 5 campaigns”, says the Grain Exchange. At the same time, the entity warns that the yields obtained so far in a large part of the areas are below expectations, so if this trend continues, the current estimate would be cut in the short term.
Faced with this scenario from the soybean milling industry they warn that some 10 million tons must be imported grain to meet the demand for soybean oil and meal from foreign buyers. According to sector projections, there will be about 8 million tons from Paraguay and 2 million from Brazil.
Meanwhile, regarding the corn, also a product of the drought, the trend in production remains downward. According to the Grain Exchange, to date the national advance of the harvest is located at 7% of the suitable area, marking a national average yield of 37.6 quintals per hectare. In parallel, the yield expectation of the late batches decreases as a result of the thermo-hydric stress of March. Faced with this scenario, the entity maintains its campaign estimate at 36 million tons. This volume represents, in absolute numbers, 16 million tons less than those collected the previous campaign.
The data that the market and perhaps also the Government are looking at, and for this reason the launch of a new “Soybean Dollar” shortly, is that shortly after the official start of the 2022/23 grain commercial campaign, the producing sector has committed the lowest volume of soybeans since the 2001/02 campaign. 4.8 million tons have been sold, slightly less than half of what was sold in the previous campaign on the same date. In terms of percentage of expected production, marketing reaches 18%, when last year it totaled 24%, and represents the lowest proportion since the 2016/17 campaign.
“In addition to the low volume committed, the bulk of the business was carried out with fixed prices. In total, 3.6 of the 4.8 million tons recorded were carried out in business modalities without a fixed price, representing an unprecedented 76% of the total, maximum in the records. That is, of the new harvest, which will formally begin in just 10 days, only 1.2 million tons have a price tag,” they detail from the Rosario Stock Exchange.
In other words, the sector was waiting for some type of measure in the short term and for this reason it is expected that from now on business will begin to be carried out hand in hand with a differential exchange rate that would encourage the sale of grain in the new harvest and the 7 million tons that were left over from last season.
Source: Ambito
