ARGENTINA- According to the US Department of Agriculture’s latest World Agriculture Supply and Demand Estimates, Argentina will likely have its smallest soybean crop in over two decades.
The South American Soybean powerhouse is still reeling from a persistent drought that has affected crop production in the region for a while now.
In the marketing year 2022-23, the country is likely to see a significant reduction in its soybean production to 27 million tonnes, according to the USDA report.
This trim is an additional 18% estimated reduction of the country’s soybean production, compared with last month’s estimate for the marketing year.
The US agency attributes this 6 million tonnes reduction to hot and dry weather conditions throughout March.
According to a previous estimate, released towards the end of February, there was an expectation that the late-planted crop, yet to enter vital reproductive stages, would recover if precipitation conditions improved in March.
However, the dry and hot weather persisted in March and caused the USDA to slash its estimates further for the Argentine soy crop.
If this estimate holds, it would be a 38% decline from last year’s output of 43.9 million tonnes and the lowest the country has had in almost half a century.
Additionally, according to the USDA report, soybean crush estimates for Argentina are reduced by 3.3 million tonnes, to 32 million- the lowest level since 2008-09, leading to lower product exports.
Similarly, the USDA estimates that soybean meal exports from the world’s leading exporter will reduce to 22.4 million tonnes this year, its lowest level in 19 years.
The reduced crop output could also bring Argentina’s soybean imports to a record 8.3 million tonnes this year, more than double its total of 3.8 million tonnes a year ago.
Global soybean production could also go down in 2022-23, according to the WASDE report. The report included a downward revision by 5.5 million tonnes to 369.6 million.
However, reduced global production is slightly offset by an expected bumper harvest in Brazil, whose estimates the USDA increased by 1.0 million tons to 154.0 million as more land goes to soybean production.
Meanwhile, according to the USDA report, Argentina’s corn production estimates were cut further by 7.5% to 37 million tonnes.