In just two days more soybeans were sold than in all April

In just two days more soybeans were sold than in all April

Eight rounds before the end of the “Dollar Soy III” ForEx initiative, the commercialization of the oilseed has picked up. However, accumulated exports remain at a minimum due to the severe drought. Argentine Late Corn is coming up, but with prices threatened.

Well on its way to the end of the Export Increase Programme (PIE III) for soybeans, the last few days were marked by a rebound in the commercialization of the bean and its subproducts. After a month of April that ended with a daily settlement average ranging in the 40,000 MT level for the SB complex, in the last weeks, more than 1 Mil MT were recorded. Thus, in just the first two days, more exports were registered than in the whole month of April, which totalled just over 600,000 MT of soybeans and subproducts.

With a domestic SB trading volume of around 8.2 Mil MT as of May 10th, half of these deals are priced “to be fixed”. In this context, the declaration of exports would find both financial needs and upcoming contract expirations as some of the factors explaining the hike in sales. It is worth noting that the volume of soybeans with prices to be fixed fell by 1 Mil MT between the previous new soybean dollar (05/04/2023) and 10/05/2023, currently standing at 6.7 Mil MT, taking business from both the current and previous seasons. A rise in bindings in the remaining rounds of the current Export Enhancement Programme could lead to more exports to finance them.

Beyond the improvement of the last few days, soybean sales volumes are expected to persist well below previous years, in line with the severe drought and its impact in production. Thus, cumulative external sales are at a 12-year low as of May 17th. The lowest point may lie further back in this time period (largely because the average production of the previous 12 years versus the average referred to here was 15 Mil MT lower) but daily exports data are available from the 2010/11 marketing year.

However, soybean trades remain at a pace above previous years, when considered in relation to harvests. Taking the latest production estimate of the Guía Estratégica para el Agro (GEA – BCR), which expects 21.5 Mil MT of soybeans in 2022/23, 27.7% of the crop has already been sold, above the 22.7% of the same period last year and 25% of the average of the last five years.

As far as the Rosario Stock Exchange Trading Floor is concerned, the week began last Monday with very low levels of activity. However, maize rose in its commercial dynamic on Tuesday, while soybeans were mostly stable in terms of open positions and buyers.

Argentine Late-Planted Corn harvest is coming, but with its prices threatened by Brazilian safrinha.

The late-planted maize harvest is approaching, which is expected to be a major export player in the coming months. After a low early-maize harvest, and with a growth in the share of late maize in the total corn planted area, the bulk of exports will soon begin to arrive at Argentine ports.

In this context, there is still about 8.7 Mil MT of the balance volume available to sell maize to the world, out of a total quota of 20 Mil MT. Exports have maize purchases that exceed shipment commitments, in view of a good carry of the 2021/22 crop and awaiting the lifting of Argentine late maize. However, the as yet unsold volume of maize runs the risk of potentially lower export prices. The reason is to be found in the north: in Brazil, more than 25% of the first-crop maize and the entire second-crop maize (safrinha) harvest is still to be collected. With a record harvest estimated at 125.5 Mil MT of maize, according to Conab, about 20 Mil MT of corn has already been harvested.

Thus, 7 Mil MT of early maize and more than 98 Mil MT of late maize have yet to be brought to market in Brazil. With this production expectation and an export projection of 53 Mil MT, according to the USDA, Brazilian harvest pressure in the coming months could have a downward impact on Argentinean maize prices. Beyond this, it is clear that the corn export dynamic continues to feel the effects of the drought, with a flow that is at a four-year low even in the coming months of harvest boom.


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