Soybean crushing records worst September so far this century

Soybean crushing records worst September so far this century

Crushing volume for the ninth month of the year totaled just 1.9 million tonnes. Although corn purchases as a percentage of production show a lag compared to previous years, 9.2 million tonnes are still available for commercialization until February.

September soybean crush is the lowest in 22 years for that month

The historic drought had a major impact on soybean production in the current season, and the low harvest volume drastically affected the agribusiness sector. The latest official data published by SAGyP show that soybean crushing during the month of September reached only 1.9 million tonnes, which denotes the lowest level of crushing for this month since the 2000/01 cycle. The cumulative crushing of the oilseed amounts to only 15.9 million tonnes for the first half of the campaign and is located at minimum levels in 18 years.

As for the remainder of the season, the volume of soybean crushing for the second half of the year would total 10.4 million tonnes, which represents a challenge for the industry in terms of obtaining the necessary inputs, which could only begin to normalize with the arrival of the new harvest in neighbouring countries around March of next year. Regarding the local market, the combination of a meagre harvest together with a great advance in the commercialization of production means that the availability of soybeans for sale for the remainder of the campaign is scarce, barely 2.7 million tonnes. As a result, Argentina will depend on its capacity to import oilseed to keep its factories in operation.

According to data from the National Institute of Statistics and Census (INDEC), foreign purchases of soya totaled 8.8 million tonnes during the first nine months of the year, reaching historically high levels. It should be recalled that, in July, with the accumulated imports of only seven months, Argentina had already surpassed its annual record volume of imports of 6.6 million tonnes registered in 2018. However, there is a downward trend in the monthly external purchases of soybeans, with a 37% drop compared to the volume imported the previous month, affecting the outlook for activity in the main export industry of the Argentine economy.

62% of the total maize supply for the 2022/23 season has been commercialized

Given the fierce drought that impacted on our country, the current season left a maize harvest that totaled just 36.0 million tonnes according to GEA-BCR, a 30% drop in production compared to the previous year. Considering estimated initial stocks of 6.3 million tonnes, the total supply of the cereal reaches just 42.3 million tonnes for the 2022/23 cycle, the lowest volume since 2017/18.

Official data show that as of October 25th, industry and export purchases of maize for the 2022/23 season totaled 26.5 million tonnes, which means that 62% of the total supply of the cereal for the current season has been traded. If we look at data from previous seasons, this is behind the 77% recorded at the same time last year, while the average for the last 5 seasons is 71%. In fact, the progress of the current season is shown as the lowest since the 2015/16 cycle.

Considering that part of the production is used for on-farm consumption, this would result in a net availability of 9.2 million tonnes of maize in the current season, which officially closes on February 28th.

As for the evolution of maize commercialization for the new season, the most recent data show that the industry and exports have made purchases of 3.6 million tonnes, which would represent 7% of the projected production for the next cycle of 56.0 million tonnes. Taking into account that, on average, during the last 5 seasons the accumulated purchases of maize for the new cycle amounted to 16% of production, there is a delay in the anticipated purchases of maize for the coming cycle. This indicates that, given the climatic uncertainty of rains that have been slow in coming and that affect the sowing of the cereal, added to the lack of commercial certainty, caution reigns in the face of the new commercial campaign.


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