January SBM exports at low levels

January SBM exports at low levels
Argentina’s main export product showing low levels in January after the strong trades done last December, due to the Government’s “Dollar Soya II”.
With the beginning of the year, the second Export Increase Programme (PIE II), mostly known as “Dollar Soya II”, came to an end. The end of this exceptional exchange rate for the Soya Complex left January with fewer incentives for trade.
In this context exports of soybean meal and pellets, Argentina’s main export, were low in January. Based on preliminary shipment data, 1.06 Mil MT of SBM and SBMP were shipped in January of this year; 22% below the volume exported last year.
February’s meal shipment schedule shows 0.6 Mil MT so far, although there’s still time for more shipments to be booked. For reference, at this time of year last year, the cargos scheduled to load had already exceeded 1 million MT. These numbers are even farther from the 1.8 Mil MT of meal exported in the entire month of February 2022, and the 1.7 Mil MT average of the last five years.
Looking at the 2022/23 season, which will formally start in April, the substantial delay in sowing is yielding, with more than 90% of the target area already planted for both soybean and maize, although considering a reduction of hectares from the initial target, and not taking advantage of the optimal sowing window in many lots of both crops. Of course, these factors can be explained by the substantial drought that continues to affect Argentina’s production areas. When considering harvest, the strong predominance of late-sown soybeans and late maize will necessarily lead to delays in the marketing and logistics of Argentine coarse grains.
Although last month’s rains have removed the worst scenarios, the situation is still complex from the production point of view, causing the 2022/23 trade dynamics to continue below previous years. This way, the drought continues to explain the mostly-cautious trading on the floor of the Rosario Stock Exchange.
In this climate, the main commercial interest is concentrated on maize, which has been the main product in the Physical Grain Market of Rosario over the last few days. While grain prices in Chicago remain somewhere between stable and bearish, the trend of Matba-Rofex shows rallies for the February position. This way, after the rains, this position had gone from 268 UDS/MT to 257 USD/MT in mid-January.
The outlook for soybeans is weaker than for corn in terms of commercial volume. Taking the latest expected production of the Guía Estratégica para el Agro (GEA-BCR), we are looking at a domestic soybean trading volume of around 8% of the crop, about half the volume of the previous season, and even less than the last five-year average.
However, unlike the corn, soybean’s bullish rally on Matba-Rofex slowed down more abruptly. With a positive trend from July 2022 to mid-January 2023, the May’23 soybean position rose during those months from 343 USD/MT to over 410 USD/MT up to January 17th. However, rains provided relief, causing a drop to 377 USD/MT at the end of January and this Thursday it was close to 383 USD/MT.
Source: https://bcr.com.ar/
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