Argentina: Ag Ministry Cut Soybean Acreage Estimate

According to the Ag Ministry Argentine farmers will plant 18.2 million hectares of soybeans this season, 0.3 million less than their previous forecast, with plantings 64% complete so far.

The revised acreage estimate is 600,000 ha less than the USDA's current prediction, and 800,000 ha below that of the Buenos Aires Grain Exchange.

Even so, the Ministry estimate would still be a record, easily beating the 16.6 million ha sown in 2007/08.

They clearly see less of a switch into soybeans from corn than the BAGE, pegging corn area this season at 3.16 million ha, a drop of less than 10% on last season. The BAGE have corn acres falling substantially to 1.875 million ha, 45% down on year ago levels, partly after soil conditions were largely too dry to plant in September and October.

The ongoing conflict between farmers and the government, and lower input costs for soybeans, are also likely to have been a significant factor.

With the country likely to be only barely self-sufficient in wheat this season, with a crop of around 7 MMT, maybe a tad more, it seems that the Ministry are using a bit of artistic licence in calling the corn crop higher than it actually is. Lying is another way of putting it.

Having periodically slapped export bans (or quotas as the government like to call them) on both corn and wheat in the last couple of years, Argentine farmers are acutely aware both those commodities are likely to be short supply again this season. Therefore earnings potential from those crops is likely to be severely curtailed, as exporters who can't export don't buy.

Whilst the hefty export tax on soy still remains in place, despite all the farmers' protestations, the crop still offers significantly higher potential returns than planting corn.

The Ministry say that 76% of the corn crop has been planted to date and that the crop "is in good or excellent condition" - but then again you wouldn't expect them to say anything else would you?

In this case 76% of the crop might in reality be as good as it gets.