Shipments of maize and soy products fall during June

Shipments of maize and soy products fall during June

As a result of the drop in Parana River levels, the importance of the southern ports of Buenos Aires province in maize shipments grows. At the same time, shipments of meal/pellets and SB oil fell in June compared to the volumes shipped the same month the previous year.

Throughout June, the situation of the Paraná River water level has become increasingly delicate over the weeks, and towards the end of last month river levels at the greater metropolitan area of Rosario city reached its lowest point since late 1970. This has had a considerable impact on the volume of maize and soy byproducts shipped from the Upriver ports.

Although so far this year SB crush has been considerably superior to the same period in 2020 (18 Mil MT between January and May 2021 vs. 15.5 Mil MT in the first five months of the previous year), during June, a total of 2.49 Mil MT of SBM pellets were shipped from the ports of the greater metropolitan area of Rosario city, a drop of 2% compared to May and 12% less than in the same month of the previous year. In addition, it is the lowest volume for the same month since the 2017/18 campaign.

Regarding oil from the oilseed, the volume dispatched during the last month reached 553 thousand metric tons, a drop of 10% and 11% compared to May and June 2020 respectively, and, like SBM, the lowest volume in the last four years. Furthermore, it’s worth mentioning that during the 2017/18 campaign, the severe drought that affected SB production considerably reduced the local availability of grains, creating a huge impact and reducing crush of SB, and therefore, a reducing volume and availability of byproducts.

Since the vast majority of the country’s crush plants are concentrated in Rosario and nearby areas, what happens with the Parana downspout will strongly influence shipments of these byproducts, since it is not possible to load from other ports.

On the other hand, the situation is completely different for maize. For this cereal, when vessels must sail from the greater Rosario area with less cargo than is actually available, as is the current case, they will usually top-off cargo in the southern ports of Buenos Aires province.

During the month of June, the total volume of cereal dispatched from all Argentine ports totaled 4 Mil MT, 20% more than during May, yet representing a drop of 11% compared to June 2020.

Taking the aforementioned into account, it is interesting to analyze what percentage of the National total was shipped from Upriver and what percentage from the southern ports of Buenos Aires province. Shipments from the greater Rosario area represented 75% of the total, which represent the lowest participation in the past four years. At the same time, the volume shipped out of Bahía Blanca and Necochea/Quequén ports represented 22% of the total maize exported, the highest proportion since at least 2018.

What comes next will raise additional questions. The late-planted corn has already started harvest, and a large volume of grains is projected to be coming in the next few months. In fact, according to MAGyP information, there are still 2.7 Mil Ha of maize yet to be harvested throughout the country, the largest area in history for this time of year. Furthermore, 2.1 Mil Ha of that total is in the in the general region of the greater Rosario area, which also marks a record. This large remnant of yet-to-be-harvested area is a consequence of the September/October drought, which delayed planting.

On the international side, all eyes are set on what will happen to the US new season, for both SB and maize. Last week the USDA reported that the area planted with maize stood at 37.5 Mil Ha, 500,000 below analysts’ estimates, whilst the SB area reached 35.6 Mil Ha, 600,000 less than what was originally estimated by the market. Having left behind the planting season, focus is now set on the weather, which will be key in determining yields.

Up to last week, there were areas in the North American Midwest, the main producing area for both maize and SB, which were showing high temperatures and reduced rainfall, so loss of soil moisture was substantial. However, forecasts for the next few days indicate that rainfall would be considerably above the norm in large key areas, providing a strong boost to crops just as the season begins the pollination stage, which is a key point for determining yields.

This news of dry weather produced a sharp drop in prices in the Chicago. On Tuesday, SB fell more than 30 USD/MT in nearby positions, equivalent to 6%, while maize registered a drop of 16 USD/MT, also 6%. Furthermore, the evolution of prices in the local market was also affected by this phenomenon. The CACR dollar-equivalent of maize prices fell on Tuesday by 11 USD/MT, that is, 6%, to 177 USD/MT, while SB suffered a contraction of 12 USD/MT, equivalent to 4%.

Regarding the FOB values ​​offered in the main ports of the major maize and SB exporters, currently Upriver prices are the lowest compared to the other ports. This phenomenon responds to two factors. On the one hand, we are currently in the middle of the maize harvest, while the SB harvest has ended very recently, compared to the other countries and which are already well advanced in their commercial cycle, whereas stem availability is no longer so abundant. On the other hand, there is a penalty in the prices for the products Upriver, due to the costs incurred by the Paraná downspout. Nonetheless, we can still observe that the price behavior has been similar in the main exporting poles for both crops, since in the last week a drop in values ​​has been observed, but comparing inter-annually, we can see a strong increase from a year ago.

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

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