By Javier Mignani*
On February 8, 2023, the Rosario Stock Exchange, through the Strategic Guide for Agriculture, published the planted area and the expected national production updated to this date.
For Corn, the drought cuts 7.5 million tons (Mt) in the first estimate of the crop, falling 15% in production compared to the 50 Mt that were expected.
The technological leap of the crop, the increasing fertilization and the late sowings, were not enough to moderate the great productive fall that the referred cereal will suffer. Late planting occupies almost 75%, a fact that can be interpreted as something positive because the rains forecast for the coming months are going to be better.
In the case of soybeans, the impact of the drought continues to deepen the deterioration of crops. The soybeans planted early were the most punished, the late ones follow the luck of the evolution of the rain.
Unfortunately, as warned in January, there was a strong adjustment in area losses, especially in second-rate soybeans. The 504,000 ha of that time are updated to 1M ha. Buenos Aires heads the list of frustrated area with 301,000 ha. They are followed by Córdoba with 222,000 ha and Santa Fe with 160,000. The production cut in February is 7% compared to the January figure, going from 37 to 34.5 Mt. In this way, it will be the second worst national harvest in the last 15 years, already lower than that of 2017/18 (35 mt).
Meanwhile, the USDA report reduced world soybean production by 5 million tons; US final stocks increased from 5.72 million to 6.13 million tons.; Brazil’s production remained at 153 million tons.; the Argentine harvest was reduced from 45.50 to 41 million tons., Far from the local projections 34.5 million tons.; Chinese purchases are sustained at 96 million tons.
For corn, world production fell by 4.57 million tons. with a reduction in final stocks of 1.14 million tons; US final stocks go from 31.54 to 32.17 million tons.; Brazil’s production remains at 125 million tons.; the Argentine harvest is reduced from 52 to 47 million tons, far from what the stock market estimates of 42.5 million tons; Chinese purchases remain unchanged at 18 million tons.
Therefore, the report is fairly neutral on soybeans and corn with a sensible rise.
Given this productive scenario in the country, I wonder……. Where are the missing dollars going to come from?
A report from the Rosario Stock Exchange evaluated that Argentina’s total exports in 2022 amounted to more than 88,000 million dollars. Of this total, agribusiness, which includes the various agricultural export complexes, contributed US$ 55,516 million to exports in 2022, an increase of 8% compared to the values of 2021. It represented 63% of Argentine foreign trade.
This year, with the low level of production, uncontrolled inflation and an optical illusion of anchoring the economy to a totally fictitious dollar, it will create a vacuum in imported inputs that will hit directly in the productive sectors. Urgent measures must be taken to surf this wave. Buy the necessary inputs for the next campaign and apply the policy of our grandparents: be conservative!
*CPN Mat. Prof. 10-1016-1
