Highlights

Soybean and peanut sowings were completed as of late January with nearly a third of the sunflower seed crop harvested. Heavy downpours in early January around the primary production regions of north Buenos Aires and south Santa Fe provinces raised alarms about additional area loss for soybeans. However, better conditions have emerged since then and contacts report that the area has largely recovered. As such, Post maintains its soybean area harvested estimate of 19.3 million hectares, with production at 55 million tons.

Soybean

Oilseed, Soybean (Local)

Market Begin Year

2014/2015

2015/2016

2016/2017

Apr 2015

Apr 2016

Apr 2016

Argentina

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Planted

19400

20000

19700

20250

19450

19500

Area Harvested

19340

19300

19530

19530

19450

19300

Beginning Stocks

10214

10214

10915

9252

13625

11002

Production

61400

60800

56800

56800

57000

55000

MY Imports

35

35

1000

1000

1000

1000

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

71649

71049

68715

67052

71625

67002

MY Exports

11669

11670

8970

8450

9000

9500

MY Exp. to EU

60

60

60

60

0

65

Crush

44890

45110

41800

42500

44700

42000

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

4175

5017

4320

5100

4500

5150

Total Dom. Cons.

49065

50127

46120

47600

49200

47150

Ending Stocks

10915

9252

13625

11002

13425

10352

Total Distribution

71649

71049

68715

67052

71625

67002

Production

Throughout the month of January, the primary growing regions of received significant rainfall, leading to increased speculation of significant area losses. At present, the Buenos Aires Grains Exchange estimates planting area at 19.2 million hectares, attributing the 4.5 percent decline in area from last season, to competition from other crops, the abandonment of areas due to flooding and drought in select areas. Although there have been reports of harsher area losses and crop damage due to excess water levels, Post crop travel and contacts reveal that the majority of affected area by these conditions have recovered in over past few weeks, particularly in the main production zones of Nucleo Sur, south Cordoba, and central-east Entre Rios provinces. As of late January 2017, the entire 2016/17 soybean crop has been planted with final sowings concluding in south Buenos Aires and La Pampa provinces last week. In south Buenos Aires province, 1st crop soybean yields are expected to be around 2.4 tons per hectare for the southeast section of the province and 1.8 tons for the southwest. Towards the western part of Buenos Aires province (Bolivar and Pehaujo), 1st crop soybean yields are averaging 2.8 tons per hectare and 1.2 tons for 2nd crop soybeans.

Weed/pest resistance is an increasingly difficult challenge, contributing to elevated production costs. A crop advisor in Nuevo de Julio estimates that this resistance is resulting in a 10-15 percent increase in costs for producers in his area. These weeds and pests include Conyza bonariensis and Amaranthus quitensis among others. The standard chemical applications that used to mitigate these weeds are not as effective, forcing producers to increase the dosage and/or modify their mix of applications and seek new pesticides and herbicides. Producers see crop rotation as the best tool against this resistance. As such, some crop advisors and analysts have begun to speculate that due in part to this resistance (along with a host of market factors) that soybean area will decline again in the 2017/18 season. Moreover, these analysts estimate that moving forward soybean planting area is likely to reach an “equilibrium” range between 19 – 19.5 million hectares. At the same time, rent prices for 1st crop soybean have increased slightly but are not near the high levels of a few years ago. At present, the rent price range is 0.6 to 0.8 tons per hectare, depending upon the area.

While the recent rains have led to area losses, the expected increase in yields will offset those declines. As such, post maintains its production estimate of 55 million tons, since the improved conditions have impeded additional losses. Moreover, producers have taken measures to minimize the effects of increased humidity via agrochemical applications to control for pests. This elevated use of technology along with greater moisture levels support Post’s national average yield estimate of 2.85 tons per hectare. Moreover, local contacts in departments of Alberti, Chivilcoy, Suipacha, and Mercedes (all in north Buenos Aires province) are expecting yields of up to 4.0 tons per hectare for 1st crop soybeans and yields at 3.0 tons per hectare for 2nd crop soybeans. In areas such as Rojas and Pergamino, yields of over 3.0 are expected with the crop experiencing good conditions and flowering.

Crush

Oilseed, Sunflowerseed

2014/2015

2015/2016

2016/2017

Market Begin Year

Mar 2015

Mar 2016

Mar 2016

Argentina

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Planted

1440

1300

1300

1250

1650

1675

Area Harvested

1440

1240

1270

1200

1650

1650

Beginning Stocks

740

740

1038

636

554

144

Production

3160

2755

2700

2600

3300

3300

MY Imports

1

1

0

2

0

2

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

3901

3496

3738

3238

3854

3446

MY Exports

63

62

300

305

118

100

MY Exp. to EU

13

20

250

20

15

0

Crush

2749

2750

2830

2735

3000

3150

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

51

48

54

54

54

60

Total Dom. Cons.

2800

2798

2884

2789

3054

3210

Ending Stocks

1038

636

554

144

682

136

Total Distribution

3901

3496

3738

3238

3854

3446


Based on updated crush figures, 2015/2016 soybean crush is revised up to 42.5 million tons. It’s reported that crushers are increasingly concerned by excess capacity. At present, crush utilization is estimated between 85 to 90 percent but lower soybean deliveries and expected declines in areas reignited fears over increased underutilization of capacity. Moreover, soybean producers have considered storing grain via silo bags to hold out for better price from crushers – leading to disruption in the regular flow of soybeans to plants. 2016/17 crush is revised up to 42 million tons.

Trade

2015/16 exports are revised down to 8.45 million tons based on updated trade statistics and expectations from traders.

Sunflower seed

Production

Sunflower seed harvest is underway with almost a third of the crop harvested as of late January. Harvest is almost completed in the northern part of the country, specifically Chaco, center-north Cordoba, and center-north Santa Fe provinces. Thus far, these areas are reporting yields averaging around 1.86 tons per hectare. As for the other major production region of Buenos Aires province, recent rains in the central and southern part of the province delivered much needed moisture to planted areas beginning to develop grain. In west Buenos Aires, the crop is closer to maturity and under good conditions. Moreover, local producers are expecting yields above those of last season if conditions persist.Contacts in south Buenos Aires province report that the crop is in good condition with average yields around 2.5 tons per hectare for the southwest part of the province, and 1.4 tons for the southeast.

Recent crop travel revealed that while producers were very enthusiastic about expanding sunflower plantings, many were having trouble planting and marketing sunflower seed for the first time in years. For example, a few interviewed producers reported not planting sunflower in over 10 years. These producers faced a steep learning curve as they reacquainted themselves with how to plant sunflower again under varied weather conditions. Some observers report that the spill-over effect of such inexperience was less than optimal crop conditions, especially in marginal lots that were previously relegated to soybeans in recent years. However, it’s expected that this should not be an issue next season as producers will be better equipped to grow the crop. Input suppliers in south Buenos Aires province (Tandil and Tres Aroyos) report less plantings of high oleic sunflower as producers were discontent with the lack of more lucrative premiums for high oleic varieties. It is unknown what effect these market dynamics will have for the make-up of sunflower variety plantings for next season.

Trade

2016/2017 exports are revised up to 100,000 tons, based on expectations of greater shipments of confectionary seed to India.

Peanuts

Oilseed, Peanut

Market Begin Year

Argentina

2014/2015

2015/2016

2016/2017

Mar 2015

Mar 2016

Mar 2017

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Planted

341

345

300

330

365

365

Area Harvested

341

341

290

290

365

360

Beginning Stocks

568

568

565

589

269

277

Production

1188

1188

930

930

1200

1190

MY Imports

0

0

0

0

0

0

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

00

Total Supply

1756

1756

1495151914691467

MY Exports

848

833

915

910

900

950

MY Exp. to EU

487

465

540

450

520

490

Crush

278

277

245

252

270

270

Food Use Dom. Cons.

48

53

50

55

53

58

Feed Waste Dom. Cons.

17

23

16

25

17

27

Total Dom. Cons.

343

353

311

332

340

355

Ending Stocks

565

589

269

277

229

162

Total Distribution

1756

1775

1495

1519

1469

1467

Production

The Grains Exchange of Cordoba reports the peanut crop is currently in good conditions with elevated moisture levels thanks to recent rains. The exchange’s surveys reveal that 50 percent of the crop is in “good” condition, 49 percent in “very good” condition, and 6 percent in excellent condition. Moreover, it’s reported that over 43 percent of the crop is beginning to flower (R1) while the rest of crop is behind (up to V5) due to initial delays in the planting earlier in the season. Recent rains were concentrated in the western and northern parts of Rio Cuarto where the crop is in good condition; however, the crop is beginning to show signs of yellowing towards the eastern and southern parts of Rio Cuarto. The Ministry of Agro-Industry confirmed as of mid-January, that the entire peanut crop for Argentina had been planted.

Trade

Based on updated trade figures, 2015/2016 and 2016/2017 exports are revised up to 910,000 and 950,000 tons, respectively.