A few days ago, we touched in on the major factor driving soybean prices this week. Dryness across Argentina has fueled a nice pop in prices.
But will these premiums be sustainable?
And how does this impact the soybean area?
The USDA isn’t prepared to cut its outlook just yet for Argentine production. But each morning my inbox fills up with tales of burned leaves and farmers whose crops are drying up.
The latest update comes out Buenos Aires, where the BAGE is considering a cut to Argentine soybean acreage due to planting delays across the northwestern part of the country.
Recently, the BAGE slashed planting area to 44.5 million acres, a decline of about 250,000 from its previous figures.
According to Reuters, about 30% of the country’s acres are still waiting to be planted, particularly in the Salta and Tucuman province.
Right now, sowing potential is rapidly declining.
Late plantings run the risk of frost damage in the May and June months. Keep in mind that the summer months are happening during the winter months in North America.
We’re keeping a close eye on the weather, but opportunities to sell for $10.00 per bushel may not last very long.
We’re still fast approaching harvest season in South America, and the window is going to open for a short period.
Stay tuned and be ready in the next two weeks.
Argentine soy planting area may shrink due to drought
BUENOS AIRES, Jan 18 (Reuters) – The Buenos Aires Grain Exchange may again reduce its 2017/18 soy planting area estimate due to sowing delays caused by dry weather in the northwestern part of Argentina, it said on Thursday.
Last week the exchange trimmed its 2017/18 soy planting area estimate to 18 million hectares (44.5 million acres) from 18.1 million, citing dryness in the bread-basket province of Buenos Aires. Some 30 percent of the 1 million hectares slated for soy in this part of the country has yet to be planted, the exchange said in its weekly crop report on Thursday.
“There is still the risk of not being able to finalize the planting plans in parts of southern Salta and Tucuman provinces, where some producers could move from soybeans to kidney beans,” the report said. The window for sowing is rapidly closing because soy planted too late in January starts running the risk of dying from early frosts during the Southern Hemisphere spring in May and June.
Argentine soy planting starts around mid-October and usually extends only into the first week of January. The exchange said Argentine farmers had planted 96.7 percent of the total area planned for 2017/18 soybeans nationwide.