The soybean crop is forecast at 27.00 million tons and the corn crop at 37.00 million tons, according to the US Department of Agriculture’s monthly report of Global Agricultural Supply and Demand Estimates.
A month ago, the USDA forecast an Argentine soybean production of 33.00 million tons and corn of 40.00 million tons.
In this context, grain futures were traded on the Chicago Market with mixed results: soybeans rose 0.67% to settle at US$550.15 a ton in May futures contracts.
While, Corn fell 0.07% and traded at US$257.27, while wheat fell 0.73% and traded at US$247.47 in May contracts.
A difficult report for Argentina
Brazil displaced Argentina as the world’s top exporter of soybean meal for the first time in history without yet calculating the effects of the drought, according to a private report. Likewise, Brazil surpassed Argentina in soybean crushing volume for the first time in 26 years.
The data correspond to the “Agroindustrial Monitor” published periodically by the Chamber of the Oil Industry of the Argentine Republic (CIARA), which on this occasion disseminated the work under the title “The lost decade”.
Despite this scenario, CIARA is one of the main entities that supports the Government in the implementation of the differential exchange rate programs launched by the Ministry of Economy to ensure the entry of dollars. The report stated that “soybean processing in Argentina closed 2022 with a drop of 10%.”
“Without considering the complex panorama that is expected for the bean (due to its poor quality due to the drought) in the imminent 2022/23 campaign, the crush data (milling) from last year deepen Argentina’s downward trend in the Mercosur milling”he pointed at the monitor.
In this context, he added that “in 2022 Argentina’s participation in the industrialization of the economic bloc was the second lowest since 1988.”
The report noted that soybean milling in the first quarter of 2023 is the second worst record of the decade with 3,439 million tons, only above the same period in 2013 when it had been 2,921 tons.
In turn, he maintained that in this decade the milling capacity of Brazil “almost equals” that of Argentina at 202,337 tons per year and 204,671 tons per year, respectively.
“The drop in soybean production due to the drought will have direct consequences on the volume of processing and there will be a sharp drop in the production of soybean oil and meal,” the report said.
He added that “the impact will fall on exports, causing one of the largest falls in the share of our world trade, returning to levels we had in 1998.”
In the case of sunflower, the document observes a more encouraging picture, given that it is estimated that oil exports could exceed one million tons, which is 165% compared to the beginning of the decade.
Among the negative effects of the drought, the impact on the movement of trucks is already beginning to be noticed. The number of vehicles entering the ports with soybeans was 11,420, the lowest record in the last four years.
Regarding corn, the volume entered the ports in March was one million tons, well below the 2.5 million in the same month last year and a quarter of the 4 million that entered in March 2020.
Source: Ambito
