SB harvest picks up pace and maize business accelerates

The dry days that followed the end of this week allowed the threshing work to advance at good pace, and the advance of the SB harvest is in line with the five-year average. In maize, prices and market conditions accelerate business.

After having started somewhat slowly, SB threshing picked up pace in recent weeks, and 81% of the area to be harvested has already been reached, according to MAGyP data. Although this is below the 91% that was registered on the same date last year, in these last seven days it was possible to exceed the average of the last 5 years (80%).

Concerning maize, also according to data provided by MAGyP, the harvest progress reaches 40% of the target area, lagging behind the 54% of a year ago and the 45% that, on average, had been collected at this point in the last five campaigns. As was mentioned in previous issues of this Newsletter, the reason for this is because of the September/October drought, where several lots that were originally planned to be sown as first/early maize, were forced to delay planting due to lack of soil moisture.

Nonetheless, according to the information provided by the Strategic Guide for Agriculture, this delay in planting ended up being beneficial in some cases, since late maize received sufficient water at key moments of the development cycle, and was therefore less affected by February’s dry spell than early-planted maize. Although early yields were not as affected as SB, late maize prospects are promising in terms of final yields. In addition, in spite of the rain forecasts were not met in recent weeks, this no longer affects the crop as it has already reached its physiological maturation stage, and following stage will be for crop to dry out in order to be harvested.

Meanwhile, regarding the logistics of harvested grains, the entry of trucks with maize to the ports of the greater metropolitan area of Rosario respond to this delay in the harvest when compared to previous campaigns. From harvest commencement in the northernmost regions (February 11) to date, a total of 270,000 trucks have delivered maize to the grain terminals in the region. Meanwhile, average in the last two years shows an influx of 315,000 trucks entering port area. In spite of the delay, the volume of truck deliveries in the past week has been the highest in the season so far, showing a considerable increase in supply rate.

As for SB, from March 11 to date, the total number of trucks that arrived at the port terminals/processing plants at Upriver amounts to 274,000, thus evidencing an influx rate that is in line with the last two years (275,000 in 2020 and 274,000 in 2019).

Regarding shipments, maize cargos from the ports of the greater metropolitan area of Rosario mark a drop compared to 2020. In the first three months of the campaign, 8.4 Mil MT would be exported from the aforementioned port terminals (for May, this includes already-shipped as well as schedule to be shipped), while in previous year, shipments reached 10.1 Mil MT for that period. In addition, May shipments would be lower than those in April (2.6 Mil MT vs. 3.2 Mil MT respectively), marking a sensitive drop. Regarding SB complex, in the first two months of the trade cycle, shipments of meal/pellets would reach 5.6 Mil MT (vs. 5.2 in the previous year), while those of oil would practically match previous cases (1.21 Mil MT in this year vs. 1.17 in 2020). Lastly, SB shipments would register a drop between April and May of this year, summing up to 300,000, while last year they totaled 1,4 Mt in the same period.

The higher volume of SB subproducts cargos responds to the improvement in export prices, particularly of vegoil, which had a favorable impact on the gross margin. As a consequence, crushing levels increased in April to 4.2 Mil MT, 24% above the processed in March and 15% above the volume crushed in April 2020. Furthermore, it is the highest monthly volume since July of 2019, and the second-highest tonnage for April in history, only behind that processed in that month of 2015. The oil production obtained thus reached 843,700 MT, while the volume of pellets/expellers of the oilseed obtained added 3.1 Mil MT.

Another noteworthy fact in recent weeks is what happened in the commercialization of maize. Despite the lower production projected for this season in relation to the previous one, the volume of commercialized grains grew strongly in the last month and exceeded the level reached in 2020/21 at this time of year. In the last four weeks, maize deals were closed for almost 5 Mil MT, and 27.9 Mil MT of the 48.5 Mil MT of projected production have already been sold, that is, 57%. The previous year on the same date, meanwhile, 24.8 Mil MT of the 51.5 obtained had been traded, which is equivalent to 48%.

Finally, a comment regarding local market prices. Same as what happened in Chicago (the international benchmark market for agricultural products) prices in the local market have fallen in the last week. Considering the price of the Rosario Cereal Arbitration Chamber, SB fell 5% from the maximum reached last Wednesday, the 12th, and closed on Thursday at USD 344/MT. The drop in maize was more pronounced, since it fell from the USD 245/MT local market historical maximum, reached on May 7 to USD 214/MT, translating to a 12% drop.

It is also interesting to see what happens to the prices of late maize. The price of maize futures with July delivery in Matba-Rofex, was located yesterday at USD 217/MT, showing a decline compared to the maximum reached on the 7th of the current month (USD 244/MT at that time). However, it should be noted that the current price of this contract (July Maize) is at the highest level in history for the time of year.

Finally, given that trade of the 2021/22 campaign has already begun, it is convenient to view a snapshot of what is happening with the futures for next year’s harvest. The Matba-Rofex maize contract adjustment price due in April 2022 was USD 195/MT, 7% below the maximum at the beginning of the month. In any case, considering the prices of April delivery futures one year ahead of harvest, these values ​​are also at the highest in history.

Something similar happens with soybean 2021/22. The May 2020 delivery contracts closed this Thursday at USD 313.5/MT, falling 4% from the maximum level reached on May 7. But taking into account all May SB futures one year from expiration in Matba-Rofex, it is at all-time highs.

Source: https://bcr.com.ar/

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