Severe weather in Argentina has reduced the national soybean yield by 18 million tons
By Diego Flammini
Staff Writer
Farms.com
Argentina soybean processors are importing their largest order of the U.S. crop in more than 20 years.
The South American country’s intention to purchase new and old crop soybeans is outlined in a May 24 USDA Foreign Agricultural Service report.
“In April 2018, U.S. private exporters reported to USDA contracts for shipments totaling 490,000 tons of soybeans to Argentina for delivery in the 2017/18 and 2018/19 marketing years,” the report says.
The current order is on top of 120,000 tons of American soybeans that Argentina bought in April for the 2018-19 marketing year.
The crop sale marks the first time the United States has exported such a high volume of soybeans to Argentina since the 500,000 tons of soybeans shipped in 1997.
Argentinian importers are likely considering U.S. beans because of severe weather.
Drought conditions have reduced Argentina’s national soybean yield from 54 million tons to 36 million tons, and some of the country’s processors are only operating at 70 percent capacity.
“There’s no question this (soybean purchase) is in response to the short crop (Argentina is) facing,” Moe Agostino, chief commodity strategist with Farms.com Risk Management, told Farms.com today. “They export 40 per cent of the world’s soybean meal and will need beans to keep the processors busy.”
Whether or not this purchase will impact market prices is yet to be seen, Agostino said.
“The only way we see this becoming a bullish market in the U.S. is if it ultimately turns into demand,” he said. “Argentina and the rest of the world buying from the U.S. because of the short crop in Argentina could move markets if we trend that way. Are we seeing it? Maybe a little.”