Corn export sales reached 18 million tons as of September 7 while
soybean sales barely totaled 6.7 Mt. USDA and IGC published put 2016/17
corn exports from Argentina at 27.5 Mt in August. In the short term,
soybean crushing remains robust, while the future of this sector looks
As of September 7, export sales of corn from Argentina (according to
official numbers) total of 18 million tons. No matter how much 16/17 corn
ends up being exported, there is certainly a long ways to go until we get
there. If exports do not keep up this pace, there will be a large
carry-over given the additional 8 million tons in production for this year.
The International Grains Council (IGC) estimates that next years’ global
corn production should stand 56 million tons below the current level. Corn
trading, however, are expected to rise to a new record given healthy demand
from the European Union, Mexico, Middle East, Southeast Asia and North
In the local scenario, IGC’s latest estimates Argentina's corn exports to
stand at 27.5 million tons for the 16/17 marketing year, tight in line with
USDA numbers. Purchases of corn by exporters accounts for 19.75 million
tons as of August 30, covering all of their exports commitments. This
figure shows a 22.6% year over year increment.
At the local grains spot market, corn bids traded in the ARS 2,250 to ARS
2,350 range depending on delivery conditions. Bid/ask spreads remain large
for new crop trading, so there is little activity on the horizon.
What to expect from soybean
As discussed in the previous reports, profit margins remain tight for both
soybean exporters and crushers.
Soybean export sales remain far behind schedule when compared to past
marketing years. Slow farmer selling is expected to continue until early
2018. Excess supply in Brazil hurts the competitiveness of the domestic
crop, and the situation could worsen as we approach the US harvest.
The local crushing sector received both good and bad news in the last
month. The US imposed preliminary countervailing duties on imports of
Argentine soybean biodiesel and unnoticed increases in India's import
tariffs. On 11 August 2017, the Indian Finance Minister raised the import
tax on crude soybean oil by five percentage points to 17.5 per cent and
tariffs applied to crude and refined palm oils doubled to 15% and 25%,
However, some favorable events also took place recently. China is
considering importing argentine soybean oil. The European market for soy
oil based biodiesel re-opened after several years of imposed punitive
tariffs because they considered its exports were unfairly subsidized. On
the other hand, imports of soybean oil from India are expected to grow by
500,000 tons (or about 13.5%) in the 17/18 marketing year, according to the
USDA attaché in New Delhi. This is explained by lower soybean production in
the country and growth in domestic demand.
Despite very low margins for the processing industry, crushing reached 4.3
million tons during July 2017, the second highest record for the month,
only surpassed by July 2015.
The domestic Soybean spot market remained very active over the past week. Traded volume increased in account of price settlements and trading in new crop soybeans. Prices for cash soybeans traded in the ARS 4,200 to ARS 4,400 range. Crush plants claimed to have good availability for receiving trucks, so logistics flowed with relative ease. Bids for new crop soybeans rose about 10 USD per ton throughout the week, closing around USD 260 per ton.