External maize sales recovered ground but remain 50% below last year’s level
External maize sales recovered ground but remain 50% below last year’s level
The season that looked set to see the highest anticipated maize sales in history is now at a five-year low in foreign sales. More than 12 million tonnes of 2022/23 maize could still be traded.
With the maize harvest located at 71% of the target area, the progress of the maize survey remains 12 points behind last year’s level, when last year it stood at 83% of the area, according to the Secretariat of Agriculture and Livestock and Fisheries (SAGyP). The delay in harvesting is explained by the high proportion of late corn in general, and the high humidity and rainfall in particular this week.
Not only that, but the drought will also mean a 38% drop in Argentina’s maize production, from 51 to 32 million tonnes. Due to the sustained domestic demand for maize, the drop in exports is expected to be greater than the drop in production. Maize exports would fall from 34.7 to 20 million tonnes, a 42% cut, according to the latest estimates of this Directorate of Economic Studies.
With this sharp drop in exports, the season that began with the highest anticipated sales of maize in history has reached a five-year low in foreign sales. However, in the last 45 days, some dynamism was resumed, with almost 2.5 million tonnes of maize for export. This number is above the average 1.5 million tonnes of maize booked abroad for this period in the last five seasons.
However, we should not lose sight of the fact that it is difficult for the Argentine Maize Complex to escape the five-year low in exports. At this point in the last four years, it had already comfortably exceeded 20 million tonnes. Moreover, the 14 million tonnes accumulated so far in external sales of 2022/23 maize are about half of last year’s commercialization, which exceeded 28 million tonnes. Commercialization and external sales have fallen more sharply than production, in view of the cautious commercial dynamism felt in the Physical Grain Market of the Rosario Stock Exchange.
However, more than 12 million tonnes of 2022/23 maize could still be marketed. Maize marketing would lag 16 pp behind last season, if we consider it in relation to the total supply (the projected change in stocks and the harvest of each year). Furthermore, more than 17 Mt of maize from the current season still do not have a fixed price.
On the other hand, this week GEA (Rosario Stock Exchange’s Strategic Guide for Agriculture) again cut 2022/23 soybean production, this time by half a million tonnes. Thus, production remains at a 23-year low, with the smallest crop since the 1998/99 season, now tied with the 2022/23 crop. Another indicator to measure the impact of the drought that Argentina has experienced: we will have the same soybean production as a campaign that had 8.4 million hectares planted, far from the almost 16 Mha planted in the current campaign and with notable distance from the 12 Mha harvested.
If we consider the purchase ratio as a percentage of the harvest, the volume of soybean purchases is in line with the average of the last five years, at 56% of production and totaling 11.2 million tonnes. Despite this, there would still be 7.7 million tonnes of soybeans available for sale, and 11.5 million tonnes would still have to be priced.
Source: https://bcr.com.ar/
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