Soybean commercialization so far this year is the lowest in at least six years

Soybean commercialization so far this year is the lowest in at least six years

Maize commercialization is the lowest since 2015, although 2023 purchases are proceeding apace. Sunflower accumulates a four-year high in domestic purchases.

During the 2022/23 season, Argentina’s grain production was severely affected by “La Niña”, a phenomenon that exacerbated the drought in the last harvest, on the way to its end for coarse grains.

If we analyze the data from SIO Granos, as far as soybean 2022/23 is concerned, around 12 million tonnes have been marketed between purchases for industry and exports, 11 million less than the previous season and 17 million below the average of the last five years. However, considering the drop in production, total purchases of the grain reached 60% of production, 6% more than the previous season and in line with the average of the last five years. Without discriminating by season, final soybean contracts and operations from January to August this year amounted to just over 20 million tonnes, a fall of 44% compared to the previous year and 50% less than the average of the last 6 years.

With the new Export Increase Programme (PIE V), an improvement in prices is observed, which could boost the commercialization of soybeans in both 2022/23 and 2023/24. The programme will be in force until the end of this month, but allowing business to be booked up to September 2024, including 6 months of the next soybean season, not yet planted. With the programme in force from Tuesday 5th, more trading days will be needed to report on the actual evolution of the programme. For now, a stable to increasing dynamic is maintained in general terms for the Physical Grain Market of the Rosario Stock Exchange.

On the other hand, maize production was also severely affected by the drought, with a year-on-year fall of 37% for the 2022/23 crop. This decline was reflected in the marketing of the season, falling by 16 million tonnes compared to the previous one. However, the pace of sales remained at normal levels, currently standing at around 67% of production, very similar to the previous season’s figures. Even when counting the tonnes traded without discriminating by crop, the fall in maize was not as abrupt as in soybean but represented a retraction of 14% of what was traded with respect to 2022. In fact, domestic purchases increased year on year, with the decline in exported tonnes. With estimated foreign sales of 20 million tonnes of maize, exports of the crop would fall by 42% year-on-year and would be 17 million tonnes below the average of the last 4 years.

Sunflower has not suffered the same degree of production disaster as maize and soybean. The growth in sunflower area, without such a significant drop in yields as in maize and wheat, left sunflower production in 2022/23 very similar to that of the previous cycle, slightly exceeding 4 million tonnes.

Stable production levels and initial stocks above previous seasons contributed to the increase in sunflower operations so far this year. The sunflower campaign advances in its first 8 months with a sales rate 53% higher than during the same period in 2022. BCR projections for sunflower 2022/23 show domestic consumption and export volumes up 6% and 20%, respectively.


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