Argentine Corn, Soybean Estimates Continue to Fall

Corn harvest is 21.6 percent complete in Argentina, but a persistent drought continues to cut down production estimates. The Buenos Aires Grain Exchange, also known as Bolsa de Cereales de Buenos Aires (BCBA), corn projection tumbled from 39 million tonnes on February 15 to 32 million tonnes on April 5. Over the same time period, the crop percentage in poor to very poor condition escalated from 57.6 percent to 78.1 percent. High corn-producing areas—southern Cordoba, southern Santa Fe, and northwestern Buenos Aires—saw rainfall between six and 12 millimeters earlier this week, but the rain may have come too late to improve production. The precipitation may help Argentina’s soybeans briefly, as just 13.9 percent of the nation’s second crop has reached maturity as of April 5. However, rainfall over the next week appears to be scarce based on a Climate Prediction Center forecast. BCBA is estimating 38 million tonnes for Argentina’s 2018 soybean crop, which would be the country’s lowest total since 2009.

Argentina is a significant player in the corn and soybean export markets, so production shortfalls have serious trade implications. The country is currently cutting its soybean export tax 0.5 percent per month through December 2019. On Tuesday, Argentina adjusted its soybean export tax to be applied on the date of shipment, instead of the date the deal was agreed upon. The Ministry of Agriculture hopes that the date of shipment modification will encourage longer term contracts, since sellers know that they will face a lower duty on a future date. Gro Intelligence subscribers can monitor grain estimates for Argentina and other major exporters as crop production begins to shift to the northern hemisphere.