Argentine Farmers Remain Slow Sellers of Soybeans

Posted on 03/09/2017 10:24 AM

Argentine farmers are estimated to have anywhere from 6 MMT to 12 MMT of stored soybeans yet to price. South American Crop Consultant Dr. Michael Cordonnier says one of the reasons being put forth by farmers is they feel their peso will continue to devaluate, providing them a better opportunity down the road.

"If the peso is truly free to float, then the market will determine if it is accurately valued or not, so I am not sure if this a valid argument of not," says Cordonnier, noting most expect sales to pick up when farmers begin to purchase their inputs for the 2016-17 crops.

"Farmers in Argentina are expected to increase their wheat and corn acreage for the 2016-17 production," says Cordonnier. "The first new crop to be planted will be wheat in May and June followed by corn starting in September or October, depending on the weather. So, sometime between now and about July, they will have to sell some of the stored soybeans in order to purchase the new inputs for their corn and soybean crops."

Cordonnier left his Argentine crop estimates unchanged, but has a neutral to higher bias following recent beneficial rains. "As with the soybeans, I am hard pressed to pinpoint any significant widespread problems with the corn crop in Argentina other than the possibility for future problems. The one down side to the corn crop is how late some of the corn was planted in northern Argentina," he says. "I don't think there has been much damage done to the crop by the recent dry weather, but we still need to watch the weather going forward."

Dr. Cordonnier 2015-16 Soybean Estimates
Est.
Maximum
Minimum
2014-15

in million metric tons

Brazil
98.0
102.0
95.0
96.2
Argentina
59.0
60.0
57.0
60.8
Paraguay
8.8
9.3
8.3
8.4
Bolivia
3.0
3.3
2.7
2.6
Uruguay
3.5
3.8
3.2
3.5
Total
172.3
178.4
166.2
171.5
Dr. Cordonnier 2015-16
Corn Estimates
Est.
Maximum
Minimum
2014-15

in million metric tons

Brazil
83.2
87.0
80.0
85.4
Argentina
23.6
26.0
22.0
25.5
Paraguay
3.1
3.4
2.7
3.0
Bolivia
0.7
0.8
0.6
0.7
Uruguay
0.5
0.6
0.4
0.5
Total
111.1
117.8
105.7
115.1


Cordonnier says around 10% of the Brazilian soybean crop has been harvested, which is now slightly ahead of 9% last year and the five-year average of 8%. He has a neutral to slightly higher bias toward the crop. "The only current weather concerns in Brazil are mostly centered on too much rainfall that is impeding the harvest and resulting in some minor quality issues," he says. "More long range, I am still concerned about northeastern Brazil where the soybeans were planted very late and will need moisture for another three months."

Additionally, full-season corn harvest in Brazil is progressing and early yield reports are favorable. He left his estimate unchanged this week but has a neutral to slightly higher bias going forward. "The long-range weather forecast looks a little more positive at least according to some meteorologists, so maybe the weather in central Brazil will be beneficial for the safrinha corn crop once again," he adds.


 

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