ARGENTINA- The soybean outlook in the world’s largest producer, Argentina, is estimated at 21.25 million tonnes for the marketing year 2022-23, a further downward revision in the latest Global Agricultural Information Network report from the Foreign Agricultural Service (FAS) of the US Department of Agriculture.
In April, FAS Post Buenos Aires was projecting the soybean harvest at 23.9 million tonnes, the lowest in 24 years and what also would be the lowest yield output in almost 50 years.
The FAS said lower-than-expected yields pushed its current estimate of 3.75 million tonnes under the USDA’s official projection in the July 12 World Agricultural Supply and Demand Estimates report.
“Post’s estimate is based on interviews with local market participants, traders and farmers who report that final yields were lower than anticipated. Post’s lower production estimate is reflected in lower expectations for crush, domestic consumption, and ending stocks,” the FAS said.
According to the FAS, drought has been ravaging the country for a long period, hence the further downward revision.
Nevertheless, precipitation levels have improved in recent months across much of the growing region, salvaging some of the estimated yields of the crop in Argentina.
While soybean crush is estimated at 29.5 million tonnes in 2022-23, it is expected to rebound to 41 million tonnes in 2023-24.
Domestic consumption is seen at 35.1 million tonnes in 2022-23 but recovering to 47.3 million in the following marketing season.
When it comes to imports, the marketing year 2022-23 is expected to register 11 million tonnes but fall to 4 million tonnes next year.
Soybean sales have been driven primarily by government programs offering exchange rate incentives, such as the third installment of the “soy-dollar” program which ran from April to 31st May 2023.
Officially known as the Export Growth Program, it was established by Decree 194/2023 and was designed to incentivize the export sales of certain agricultural commodities.
However, sales since the ending of the soy dollar program have been anemic as producers hold their remaining soybeans in anticipation of future soy dollar incentive programs.
While the soybean outlook for Argentina looks grim, the FAS projects a recovery in soybean production in 2023-24 to 50.5 million tonnes on 16.9 million hectares based on a return to normal weather patterns.
“Some analysts are anticipating a change to anEl Niño weather pattern, which usually means higher than average precipitation in Argentina’s main production regions,” the FAS said.