Soybean and maize purchases remain at seven-year low

With main planting operations coming to an end, soybean and maize trades are the slowest in terms of volume in the last seven years, with a large portion of purchases still to be fixed. Brazilian maize exports in January were the highest in history.

Soybean and maize planting will be coming to an end in the coming days, after months of successive delays when we compare to previous years. The lack of rain, due to the third consecutive Niña year, was felt in the planting progress over the last few months.

By mid-October, corn planting progress was well below last year’s level and far from historical planting averages. Consequently, with this delayed planting progress, the largest volume of maize entering ports and crush plants is expected closer to June than to March.

Soybeans also showed substantial delays in sowing, and the lack of water in both crops aims to cut yields sharply. In this sense, as the Guía Estratégica para el Agro (GEA – BCR) pointed out a few days ago, yields are expected to be around 42.5 Mil MT for maize and 34.5 Mil MT for soybeans in the 2022/23 main season. This implies cuts of close to 17% and 18% year-on-year, respectively.

In this context, caution continues to be the predominant attitude coarse grains market. We need to go back to previous cycles, such as the 2001/02 season to find such a low volume of new soybean sales, while maize trades are at their lowest levels since 2016/17. Moreover, the impact of the drought can also be noted in both soybean and maize trades to be fixed. In this regard, 56% of corn sales are priced to fix, highest since 2013/14; while almost 74% of soybeans sold are still unpriced. While this number is slightly below the same week in 2022, it is still far from the five-year average of 57%.

On a record-breaking path: Brazilian corn exports in January were the highest in history.

With a completely different outlook to that of Argentina, Brazil is on its way to becoming the world’s leading maize exporter this season. The South American powerhouse, which had already dethroned the United States as the main global producer and exporter of soya, aspires to export 50 Mil MT of maize this 2022/23 season, above the almost 49 Mil MT projected for the United States.

As a prelude to this record harvest, our main trading partner is beginning to liquidate inventories to make way for the coming corn and soybean seasons, both of which are on track to be the best in history. In this sense, last January was the month with the highest maize exports in Brazil’s history, more than doubling compared to the previous year. Not only that, the line-up of shipments for February is close to 2.3 Mil MT, tripling last year’s exports. If these figures are met, we would find ourselves with the second highest February corn exports in Brazil’s history, only behind February 2016.

Source: https://bcr.com.ar/

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