It appears that the soybean crop has no soil. Since pickers have started transiting the lots, oilseed volume estimates have been lower and lower.
The Buenos Aires grain exchange has once again cut agricultural production by 1.5 million tons and expects a volume of 21 million tons52% less than the previous cycle and 53% less than the average of the last 5 campaigns.
Entity cut occurred because itThe yields were lower than expected, mainly on the central region of the agricultural area. and there was significant losses of arable area of second-grade soybeans.
According to the institution’s data, the crop covers almost 70% of the area and the national average yield is currently 1,520 kiloseven below the aforementioned 2008/09 campaign, with 1,920 kilos, also affected by drought.
Even the Rosario Stock Exchange had reduced the production of oilseeds to 21.5 million tons last week, realizing that the most productive area of the country -core region- the harvest collapsed to 4.1 million tons20% of what was foreseen at the time of sowing.
As for maize, the second most important cereal in the country, the Buenos Aires Grain Exchange maintained its production projection at 36 million tons, 29% less (15 million tons) than the average of the last 5 campaigns.
To the loss of yield, to soybeans add the sharp drop in price. On Friday, the price of oilseeds in the Chicago market was $527. But today, Thursday, it closed at $488, a drop of 7%, the lowest amount since January 3, 2022.
Mainly, this marked decline is due to two reasons, according to the analysis of Juan Manuel Uberti, an analyst at the Grassi brokerage: Soybean and corn planting advances in the United States, and the weather would play in its favour, which is why a panorama of record production and strong stock recovery is consolidating by the end of this year; and on the other side, Brazil confirms its record soybean harvest with over 150 million tons.
The values of wheat and corn also declined, following the announcement of the extension of the agreement between Russia, Ukraine, Turkey and the United Nations for the safe corridor in the Black Sea.
Given this landscape, and taking into account that the soybean complex is the one that brings the most foreign currency into the country this year they will stop inserting US$19,000 million, considering the lower production and exportable balances. Already between January and April 2023, agro-exporters liquidated $5,237 million, $5,861 million less than in the same period in 2022.
A consolation for the Government is the forthcoming wheat and barley campaign, which according to the forecasts of the Buenos Aires Wheat Exchange, the harvest will reach 23 million tons, a growth of 42%, and more than 4,500 million dollars will come in from exports, almost 50% more than in the previous cycle.
Charles Arterburn is a seasoned business journalist for News Rebeat, where he provides comprehensive coverage of the latest trends and developments in the world of finance and economics.