The last week of soybean trading has focused its attention on one major variable: The speed of soybean planting down in Argentina. This story is good news for farmers looking… now.
Though we’re hearing that La Nina will start to weaken in the spring months, dryness across Argentina has reached its slowest pace in history, according to Pablo Pochettino of Intagro in Buenos Aires. AgroEducacion has said that the mild La Nina system is pushing regional temperatures above normal. The lack of rain isn’t helping. Planting is now just 72% of the 44.7 million acres that were estimated. Next week, any numbers tied to Argentina will be the first thing I’m looking at regarding soybeans in the WASDE report.
A sharp reduction in USDA expectations may present one of the first opportunities to obtain futures prices not seen in a while.
Argentina’s Soybean Planting Pace Is Slowest in History
For Pablo Pochettino, a grain broker at Intagro in Buenos Aires, this is the slowest planting in Argentina’s history.
The problem seen by experts is that there are still nearly 12.8 million acres to be planted and 40% of this surface corresponds to northern Argentina, which has wide areas of drought. In addition, there is need for urgent recovery because the planting window closes in the middle of January.
For corn, the perspective is similar. There is a historic delay of the corn planting with only 6.1% of the area planted of the projected 13.3 million acres.
“The lack of moisture on the surface in the far north of the country includes multiple fields. Also, because the crops are up against key planting dates for peak yields, the plot thickens with the current climate conditions,” says the AgroEducación report.
In a conversation with Agriculture.com, Carlos Pouiller, national director for market studies at Argentina’s Ministry of Agriculture, said that the weather-driven market will be a big factor for January and February. Regarding the crop sales and the gradual reduction of export taxes on soybeans of 0.5 percentage points per month that starts now in January, Pouiller expects a slow market.
“Producers will be cautious throughout 2018, but I believe that sales will be increased in the middle of the year,” says Pouillier.
“What is concrete is that until now [as of December of 2017], there are more forward sales than in the previous cycle. That is 6.57 million metric tons in this cycle and 4.48 million metric tons in the previous cycle,” he added.
More and more crop pressure problems with plagues and caterpillars have been seen in Argentina. The Asian Rust on soybeans was reported for the first time to have survived the winter in the country in 2017, according to the country’s National Institute of Agricultural Technology. This was reported in the province of Misiones, which borders the state of Paraná in Brazil. So far, the Asian Rust has not generated so much loss in Argentina as it did in Brazil.