Soybean crushing in the first five months of the current season is the lowest since 2004/05

Soybean crushing in the first five months of the current season is the lowest since 2004/05

The idle capacity of the industry would reach 62% during the current cycle. Meanwhile, early maize planting is progressing with strong delays due to the lack of rainfall.

Soybean crushing accumulated from April to August 2023 is the lowest in 18 years

The drought that impacted on the current season’s agricultural harvest left soybean production 50% lower compared to the previous cycle, reaching the lowest harvest level so far this century. Therefore, the oil industry suffered one of the greatest collateral effects, since it uses soybean as the main input to produce meal, oil and biodiesel.

In the context of this sharp drop in production, it is not surprising that the volume of oilseed imports has reached record levels as a way of sustaining the supply of soya and local industrialization. According to data provided by the National Institute of Statistics and Census (INDEC), from April to August, 6.4 million tonnes of soybean imports were accumulated, registering an all-time high, and more than doubling the highest volume reached in 2020/21 for the same period. In fact, it is worth mentioning that so far this year up to August, 8.2 million tonnes of imports of the oilseed have been accumulated, and that the volume imported in the first seven months of the year already exceeded the annual record of foreign purchases, which had been reached in 2018. However, the Secretariat of Agriculture, Livestock and Fisheries (SAGyP) reported last Friday that the crush of the oilseed reached 2.1 million tonnes during the month of August and has accumulated just 14.0 million tonnes so far this season. Thus, despite the record volume of imports, soybean crush in the first five months of the current cycle is recorded as the lowest since 2004/05.

The theoretical oilseed crushing capacity of the oilseed industry in Argentina would total 67.5 million tonnes per year in active plants, while soybean crush would reach only 25.6 million tonnes in the 2022/23 season. Consequently, it is estimated that the industry’s idle capacity for the current season would amount to 62%.
Considering that oilseed imports have accumulated a record 6.4 million tonnes so far this season and are estimated to rise to 10.8 million tonnes in the entire 2022/23 cycle, it is observed that the idle capacity of the industry without imports would reach 78% during the current season.

Early maize planting has started in Argentina, but the lack of rain delays progress

As is well known, early maize sowing begins in September, understood as grain sown until mid-October, in general terms, although it depends on the region of the country.

According to SAGyP data, maize sowing for the cycle that will begin in March 2024 has already started with an advance of 9% of the estimated area to be sown. The planting of the crop not only shows a delay of 3 p.p. compared to the previous year but is 9 p.p. behind the average of the last five seasons, as a result of the lack of rainfall that is generating a large deficit of moisture in soils in key production areas. Buenos Aires and Córdoba are among the provinces with the greatest progress compared to previous years, while sowing in Santa Fe and Entre Ríos is progressing more gradually.

As a result, according to information from GEA, the lack of rainfall needed for the grain sowing period threatens to reduce the estimated hectares to be sown, and producers could opt instead to sow a larger area of first soybeans.


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