According to the Buenos Aires entity, the panorama is complex from the beginning, because it is presumed that We will have a “weak or neutral Niña” climate forecast; because beyond the advances announced by the national network for monitoring the chicharrita, the threat to corn is latent and because the input/product ratios are not good. For all this, It is estimated that a total area of 28.25 million hectares will be planted with the main summer crops, where soybeans grow and corn falls in planting intention.
Regarding this point, Rodolfo Rossi, president of the Soybean Chain Association (ACSOJA) assured in dialogue with Scope As was said at the last congress of the entity -held last week in Rosario- the crop is picking up the curve. According to Rossi, “this year the expectation is that soybeans will take up a large part of the fall in corn, so, doing the math, with a normal year, if it happens and the meteorologists are wrong and with some application of technology, we will probably be around a production of 55 million tons. That will reduce the idle capacity of the industry and with what we import from Paraguay, we can get back on the right track. In any case, what we want is not for one crop to replace another, but for it to be able to be added from all sides and that is not happening because the economic conditions are not right.”
Rossi’s statements are perfectly in line with what was announced by the stock exchange entity, since the projections indicate that 19 MHa of soybeans, 6.3 MHa of corn, 1.9 MHa of sunflowers and 1 MHa of sorghum would be planted, where soybeans would grow by 9.8%, sunflowers by 5.4%, sorghum by 5.3% and corn would fall dramatically by 20.3%.
Beyond the efforts from the productive, academic and technical entities that participate in the national monitoring network of the chicharrita, numbers rule and Not only would corn fall in planting intention but also in technology applied to the crop.
Federico Zerboni, president of the Corn and Sorghum Association (MAIZAR) explained to Scope The focus has changed regarding the chicharrita, which was previously the center of uncertainty. Now, the lack of rain, the drought that is spreading and the bad international prices due to the high world production of corn are the main factors. According to Zerboni, “the chicharrita issue is latent, but we believe that it will not complicate matters anywhere. What does complicate matters is if there is no humidity, so we have to go day by day. Today, the prospects are not good and that is reflected in the sale of seeds, which is lower than other years, and with a rather complex situation – especially in the north – in terms of finances. The producer prefers to grow soybeans, which is a cheaper crop, with less investment and does not go into debt to plant corn. Because with low international prices and high internal costs, the system cannot withstand retentions.”
Production projections for the main campaign
The most important thing from now until the end of the 2024/25 campaign is the evolution of rainfall, especially during the sowing window and the period of determining yield in each of the productive areas. According to the BCBA analysis, “the harvest estimate would amount to 52 MTn for soybeans, 4 MTn for sunflowers and 3.3 MTn for sorghum, reflecting year-on-year increases of 3.0%, 11%, and 10%, respectively. The opposite is the case for corn, with a production projection of 47 MTn, which implies a year-on-year decrease of -5.1%.”
In this context, Ramiro Costa, chief economist of the entity, highlighted that the projected production of 130 million tons for the 24/25 campaign represents an increase of 2.6% compared to the previous campaign.
The problem is the lack of water and the numbers, which don’t add up.
Expectations of a good harvest in Brazil and the United States are pushing grain prices down, even below last year’s averages. The Buenos Aires-based entity detailed that “the average available price of soybeans is at 368 USD/ton, which represents a 24% drop. For its part, corn reaches 155 USD/ton, that is, 17% below the value recorded in the same period of the previous year.” The drop is significant, considering that both crops account for practically 3/4 of the total harvest.
Regarding this concern, the Mediterranea Foundation warned in its latest report called Productive Monitor that agricultural margins are “in cotton wool.” The report explains that “when considering the average yields of each region, except for corn in the extra-Pampas area (center-north of the country) which is adjusted 30% below the average to capture the negative effect that “the chicharrita” had in these areas, it is estimated that between January-August
This year, the producer’s net margin (after taxes) averaged USD 373/hta in the core zone (southeast of Córdoba) and USD 102/hta in the extra-Pampas zone (general assumptions: 500 hectares, own field, 50% soybeans – 50% corn). In the core zone, an improvement of 42% is observed compared to the margins of the 2023 drought (USD 263/hta), but in the extra-Pampas zone they were even 16% worse (USD 122/hta) and two consecutive years of poor results have already accumulated in the region. In perspective, this year’s margins are 60-80% below the 2022 records prior to the drought, mainly due to the drop in grain prices.
According to the entity, “the margins projected for 2025 assume “normal” average yields in both areas, for both soybeans and corn. It is assumed that in extra-Pampas areas the adjustment variable for the “chicharrita” effect of corn will be the sowing area and not so much the average yield (producers who foresee yield losses similar to those in 2024 will not sow the crop directly). All else being constant, given the expected prices for soybeans and corn in Chicago in 2025 (USD 389 and USD 197 per ton, respectively), the margins (after taxes) are giving USD 318/hta in the core area and USD 145/hta in the extra-Pampas area, 65-70% below the last year in which “normal” yields were recorded in both areas (2022).
The rainy season and record prices for grains are long gone. Today, the reality is different and with no rainfall in the short and medium term forecasts, the agricultural campaign is going uphill: there are no mysteries, as always, water and prices are what rule. That is why the withholdings hurt more than ever, because it is no longer about earning more or less but about avoiding bankruptcy in 70% of the plots, where the business is through leasing. Here is the explanation of why producers will continue forward, but will make their claims defensively. This will also impact the treasury and the economy as a whole, since agricultural exports would decrease by 3.1%, reaching US$ 28,793 M. and tax collection would be US$ 13,950 M. (-3.7%) and the added value would be reduced to 40,890 MUSD (-2.2%).
Source: Ambito
