Income projections in foreign currency are not very encouraging and the fact that producers sold 14.5 million tons of soybeans during the month of September under the Soya Dólar 200 program already detracts from volume and willingness to sell to soybean producers who still have unsold .
with today’s photo projected 2023 agricultural sector foreign exchange income will be US$11,372 million lower than in 2022. Total revenue for 2023 is projected at $38,506 million versus $49,878 million in the previous campaign. The worst drought in recent history and the recurring frosts of October and the first week of November have been the main factors that influenced the drop in production and exportable balancesnot just wheat but also soybeans, corn and other winter grains.
In the same sense, the entry of fresh dollars from export withholding taxes, the most distortive and anti-export tax of all, will be reduced by US$1,984 millionrising from $9,853 million in 2022 to a projected $7,869 million in 2023.
Foreign currency income of the top five grains, feedstuffs and oilseeds (wheat, corn, sorghum, soybeans, sunflower, oils and by-products) is expected to decrease $8,766 million, from $42,034 million to $34,182 million. It implies it these products are responsible for 77% of expected losses in foreign exchange income in the 2023 total. The drought not only had direct negative effects on the evolution of established crops and their yields, but also prevented the planting of maize during the month of September, the best planting window for high-yield corn and planting at the best time for premium soybeans.
All this delay in planting imply lower expected returns, in the case of early sowing corn that can no longer be sown, the drop in yields compared to late sowing or second sowing corn is approximately 4,000 kg/ha. In the case of soy, being a crop that responds to the photoperiod, every week of delay in planting means lower potential yields at the harvest.
The above is the main reason why the inflow of foreign exchange will be severely affected in the last two months of 2022 and the first half of 2023 (see infographic “Total foreign exchange income”). The January-June 2023 foreign exchange inflow of $15,850 million was down $3,294 million from the foreign exchange inflow for the same period of 2022, $19,144 million. This decline in foreign exchange earnings is direct consequence of the lower production of wheat and the delay in the plantations of corn and soybeans.
The first decline occurred in grain production when One million hectares could not be planted due to lack of moisture in the soil, a loss equivalent to 4 million tons. The losses continued with 5-month droughts affecting plantable crops and subsequent frosts of the past 60 days, losses estimated at a total of 6 million tonnes. In total, wheat production would have been reduced by 10 million tons, from 22.5 to 12.5, which would cause a drop in the exportable balance from 15 to 6 million tons.
November – December 2022 and January – February 2023 are months that will be affected due to the sharp decline in grain production and its direct impact on the lower exportable balance of 6 million tons, the lowest export volume since 2016 $
In wheat alone, currencies projected for the current crop ($2,208 million) could be reduced by $3,042 million from a year earlier ($5,250 million). Starting in March and April, the decline in early maize planting area will directly affect the lower production and decline in export supply in the early months of the year.
For 2023, corn exports are projected to be 30 million tonnes against the 35 million exported in the year, implying lower foreign exchange earnings. Projected exports of maize next year would total $9 billion, down $1.15 billion from $10.15 billion this year.
Soy It is the product with the greatest potential loss of foreign exchange incomeWhile soybean oil and meal exports are expected to increase, the already confirmed sharp decline in soybean oil and meal prices for 2023 has a negative impact on foreign currency earnings.
Let’s see the numbers of the soy complex:
soy 2023: exports of 4 million tons, representing 2.2 billion US dollars against 3.9 billion US dollars in 2022 with exports of 6 million tons, combination of lower exportable balance and drop in price.
Soy flour 2023: US$ 636 million exchange rate drop due to exports. They go to 27.2 million tons and $12.1 billion; compared to this year, which recorded 24.5 million tons exported and a turnover of 12,740 US dollars.
Soybean oil 2023: Foreign exchange income decreases by US$1,659 million as exports fall from US$8,575 million to US$6,916 million.
Although the decline in exports will be seen throughout next year, the steepest drop will be in the first quarter, when $2,848 million would be lost, 86% of the first half’s loss.
Today 9 million tons of unsold soybeans remain in the hands of producers$5.4 trillion, and judging by the producers’ sales strategy, they don’t expect to sell a pound of soybeans until the trading horizon clears or the government implements a new soybean plan. taking the quarter’s depreciation.
The producer is willing to lose the “reverse” (market fall) of USD 22 per tonne between the available soybean price of USD 400 per tonne and the May 2023 soybean price of USD 378, because the alleged exchange rate improvement will be much greater than that difference.
In the past, in these same pages, and when the impact of the “200 dollars of soybeans” was already known, we said that it would be “very difficult for soybean producers who have already sold the equivalent of 7,000 million US dollars having to sell. This could be the boomerang for the government in the last quarter of the year when it will face a desert of foreign exchange and a producer who has managed to consolidate liquidity that he did not think he had at this time of year ”. The prognosis is coming true. And summer is coming.
Source: Clarin
