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29/01/2018 0:00 - Agricultural Commodities Market
EMILCE TERRÉ
Supply and Demand Estimates for Soybean 2017/18 in Argentina

Rosario Board of Trade’s Research Department has updated its supply and demand estimates for soybean 2017/18 in Argentina, which will formally begin next April. We now expect a drop of production as a consequence of the lack of rain, together with a rise in foreign and domestic demand that will ultimately reduce ending stock by 30% YoY.

Our Research Department projects seeded area for soybean in crop year 2017/18 to drop 3% to 18.5 million hectares (Mha). Even when producers intended to seed around 18.8 Mha (still behind previous year, as producers favored corn), lack of soil moisture prevented further seeding.

At the same time, water deficit lowered potential average yield to 2.9 tons per hectare, from 3.3 t/ha previously projected. With a smaller area and lower yields, production for 2017/18 is now estimated at 52 million tons, -9% YoY and the lower volume in five years.

 

Partially offsetting lower production, beginning stocks of soybean for 2017/18 marketing year are estimated at a record high of 12.5 million tons, 3MT above last season, though total supply will still fall below last year’s by 2 MT.

On the demand side, we expect lower export taxes together with a strengthening US dollar to boost consumption of soybean and byproducts. Crushing is therefore now estimated at 44 million tons, +2% YoY but still below 2014/15 record high of 45.1 million tons. Other domestic uses will add another 4.8 million to disappearances, based on higher seedings in 2018/19 and a strong livestock industry.

Meanwhile, foreign demand is expected to pick up and absorb 9 million tons of beans (above last year’s 8.1 million, but again behind previous year’s record). Total demand will then reach 57.8 million tons, 1.8 million above last year and second higher on record.

 

Higher demand and lower supply will ultimately lower stocks. We expect that from 12.5 million of beginning stocks the 2017/18 marketing year leaves 8.8 million tons of ending stocks, -30% YoY and the lower volume in the last 5 years.

Stock/consumption ratio will then fall from a record of 22% on marketing year 2016/17 to 15% in 2017/18, the lower level since the marketing year 2012/13.

 

Last table summarize the main supply and demand indicators for soybean in Argentina, according to Rosario Board of Trade’s Research Department to January 2018.

 
 

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 Rosario Board of Trade

The Rosario Board of Trade is a centennial institution located in Rosario, in the most important agroindustrial zone of Argentina. Throughout its history it has created and boosted transparent, solid and reliable markets: the Grains Physical Market, the Futures Market, the Capital Market, and the Livestock Market.

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Bolsa de Comercio de Rosario Córdoba 1402 - S2000AWV
TE: (54 341) 5258300 / 4102600
Rosario - Santa Fe - Argentina

Oficina Buenos Aires Reconquista 458 piso 7° - C1003ABJ - Cdad. de Buenos Aires.
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contacto@bcr.com.ar