Argentine farmers, anxious about an increasingly murky political outlook and economic turmoil, are turning toward soy over more expensive corn to cut costs, a shift that could impact next season’s harvest in one of the world’s top grain exporters.
The area in Brazil to be planted with soybeans in the 2019-20 season, which starts this month, will grow by the slowest pace in 13 years as a global trade war and swine fever in China cloud the outlook for farmers, according to analysts at AgRural.
The soybean harvest in Argentina for the 2018-19 crop year is almost complete, according to the Buenos Aires Grain Exchange. The forecast for total production was the second-highest in 19 years at 56 million mt, up 48% year on year due to a better than expected yield of 3.35 mt/hectare, BAGE said.
A Brazilian grain growers association has launched a hot line to encourage farmers to report practices on the part of Germany’s Bayer SA that potentially could be anti-competitive, according to statement sent to Reuters on Tuesday.
Brazilian soy exports to China will definitely decline this year as African swine fever in the world’s No. 2 economy cuts demand for the animal feed, but potential growth in meat exports would offset this, Brazil’s agriculture minister said on Monday.
Argentina's soy harvest has progressed at a brisk pace over recent days, showing excellent yields that could push the crop higher than the currently forecast 53 million tons, the Buenos Aires Grains Exchange said in a report last week.
Soybean growers in Argentina are playing a waiting game, wagering on better prices ahead as the U.S. and China inch toward a trade deal and as nation’s currency keeps depreciating. Farmers on the Pampas arable belt have signed delayed-price contracts for almost three quarters of the 12.2 million metric tons they’ve sold to crushers and exporters so far, according to government data. That compares with 60% at the same stage last year.
Brazil’s soybean exports are expected to come in 14-18% down on the year in 2019 due to lower production and reduced buying by China, industry reports showed.
Brazil and China are expected to hold their first high-level political and economic talks since 2015 later this year, Brazil’s agriculture trade secretary said on Thursday, in a move likely to boost farm trade between the two countries.
Brazil is poised to export more corn than soybeans for the first time in a year this January, although sales of the oilseed remain high for the period, according to government and shipping data.