Two months after the end of the campaign, there are almost 10 Mt of maize in stock.
Total purchases of the current 2019/20 harvest are close to 42.4 Mt. This number is below what was acquired on the same date of the previous season. At the same time, the purchase record increased 1.5 Mt during the month of December. With this, 82% of the production of the cycle is sold, subtracting to fix the price of 6% of that tonnage. If the difference between production and purchases (9 Mt) is deducted what is used that does not enter the declaration of industrial purchases, there would be almost 5 Mt of 2019/20 corn available to be marketed. This volume pending commercialization can be valued at the equivalent of US $ 1,035 million, considering the FAS price published by the Rosario Stock Exchange for January 7, 2020.
This volume is not considering the carry-in of the 2019/20 cycle, which amounted to almost 7 Mt, so it would increase the available supply. The volume of maize for this season still available is seen in the official statistics of commercial stocks, which amounted to almost 10 Mt by the end of December.
The Affidavits of Foreign Sales (DJVE) of maize for the 2019/20 season as of January 7 reach 34.2 Mt. Although this record is 4 Mt below the tonnage declared for external sales at the same height the previous year, it remains the second largest in history. Prior to the suspension of the registration of corn exports, shipments abroad were projected at 36 Mt, but with the recent measures taken it is unlikely that 2019/20 exports could exceed the figure of 35 Mt. Up to and including November, according to data from INDEC, Argentina exported 32.5 Mt of maize 2019/20; while shipments in the last month of 2020 are estimated at 983,000 tons. As of December 30, the export sector had already acquired the maize projected to be shipped throughout the 2019/20 season, with 93% already shipped as of December inclusive.
Up to date, industrialists and exporters have acquired 11.3 Mt of the new season to be harvested in 2020/21, representing 23% of the projected production. This is below the purchases on the same date of the previous year (18 Mt) although it far exceeds the average of the last five seasons (7.3 Mt). Regarding the participation of the businesses to be fixed, with 29% of the purchases made under this modality, this ratio is slightly below both the previous season (30%) and the average of the last five years (31%).
Returning to the analysis of the total purchases of maize 2019/20 at the end of last December, these total 42.4 Mt and are equivalent to 72% of the total supply of maize in the commercial year (the production of the current campaign is taken into account and the remaining stocks from previous cycles). The proportion of purchases over the total offer this campaign is then in line with the average of the last 5 campaigns (70%).
On the productive area, the maize in the core zone continue to suffer from the lack of rain. GEA estimates that 65% of the area of this zone presents severe degrees of drought. In the center and south of Santa Fe, west of Cordoba and north of Buenos Aires there are about 400,000 ha of maize in fair to poor conditions, which represent 30% of the early maize in the region. In the first days of the year, only the south of Córdoba managed to accumulate about 30 mm of rainfall. Currently, 75% of the crops in the core area are in the first stages of grain filling for which a water replacement is imperatively necessary. The water was enough to sustain a good flowering but now the soils no longer have enough reserves to achieve a successful filling, so the rains in the coming weeks will be crucial for these crops.
Chicago: contracts bought and prices on the rise
In the international context, an interest rate scheme close to zero is presented in the world, with the expectation of being maintained in the coming months. This situation has led the funds to invest more capital in commodities, including agricultural commodities. Thus, international conditions encouraged a net buyer positioning of the funds in Chicago that exceeded 40 Mt on 29/12/2020.
In the same sense, by modifying the net position from 30 Mt sold on 27/10 to the current status of the funds, it has contributed to a sustained rise in the prices of yellow beans over the last few months, reaching maximums of US $ 183.46 / t on 12/29.
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