Argentine soy harvest gets triple upgrade - corn only a double lift


Argentina's soybean crop received its third upgrade in two days, as the Buenos Aires grains exchange upped its estimate, citing record yields – although opinions differed somewhat on corn crop potential.

The Buenos Aires grains exchange, which had previously signalled the potential for uplifting its forecast for Argentina's soybean production in 2016-17, raised the estimate by 1.0m tonnes to 57.5m tonnes.

With the harvest estimate at two-thirds completed, the exchange cited record yield results in provinces such as Entre Rios, which promoted a forecast of a national yield of 3.19 tonnes per hectare – narrowly ahead of the record 3.17 tonnes per hectares set two years ago.

The exchange said its forecast took into account the loss of 1.15m hectares of crop to heavy rains, inundations which had prompted some observers to talk of a sub-50m tonne harvest.

Yield upgrade

The upgrade came hours after the Rosario grains exchange raised its estimate for the harvest by 1m tonnes to 57m tonnes.

While acknowledging weaker yields in parts of Santa Fe and Buenos Aires provinces, "the results that are being obtained in the western side of the country and in the provinces of Chaco and Santiago del Estero dominate the national figures", the Rosario exchange said.

It had been "very important and opportune" that rains had moderated in the second half of April and into this month.

The exchange nudged higher its forecast for the Argentine soybean yield by nearly 0.1 tonnes per hectare to 3.17 tonnes per hectare.

'Downtrend in price continues'

Meanwhile, the US Department of Agriculture on Wednesday lifted its forecast for the harvest by 1.0m tonnes to 57.0m tonnes.

While failing to expand on the thinking behind the upgrade, the USDA said that "soybean supplies in Argentina will be more than adequate to meet processor demand, though some uncertainty exists regarding producer willingness to sell in light of the progressive reduction in export taxes expected to begin in 2018.

The USDA also flagged the impact of larger harvest expectations in depressing prices, pegging upriver valyes at $351  a tonne, down $22 a tonne month on month.

"The downtrend in price continues as growing supplies in South America and expectations of a sizable crop in the US pressure the market," the department said.

Corn upgrades

The USDA also lifted its estimate for the 2016-17 Argentine corn harvest, by 1.5m tonnes to a record 40.0m tonnes, again flagging a pricing impact.

Over the past month, Argentine corn prices had "experienced unusual volatility ending at $161 a tonne, dropping $4 a tonne on prospects for ample supplies".

The Buenos Aires grains exchange raised its corn harvest estimate too, by 2.0m tonnes to 39.0m tonnes, citing in part a 200,000-hectare upgrade to its forecast for seedings in the late, December-January window.

(Many Argentine farmers avoid sowings in November, for fear of crop reaching the heat-sensitive pollination period at a time of hot temperatures.)

The exchange also flagged "very good" results from the early harvest, which is now 31.8% complete.

Heat stress and leaching

However, the Rosario exchange stuck with its estimate for Argentine corn production in 2016-17 of 38.0m tonnes.

Yields had proved "lower than expected" in central areas, with results from Santa Fe and Entre Rios not living up to buoyant expectations.

"Heat stress in December, and the leaching of nutrients among other problems caused by excessive rains, placed a ceiling on the grain's yield potential," the exchange said.


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