Inland roads fill with trucks of new crop maize
March kicked off with a noticeable jump in the number of trucks entering the greater metropolitan area of Rosario city terminals to discharge maize. Shoulder to shoulder with threshing progress in the fields, export prices from Argentina remain below other reference suppliers.
The 2021/22 maize campaign formally kicked off this week with the numbers of trucks entering the plants in the Rosario city area to discharge corn. The number of maize trucks arriving at these terminals between Monday and Thursday increased from an average of 555 trucks per day last week, to an average of almost 1,950 on this one. Up to Thursday, a total of 7,777 trucks delivered was recorded.
Regarding soybean, the first truck discharge at Rosario terminals for the 2021/22 campaign took place on March 16th, giving way to the formal start of the said cycle. According to data from the Ministry of Agriculture, Livestock, and Fisheries (MAGyP), as of March 9th, trades were made in the domestic market for 9.8 Mil MT of 2021/22 soybeans, including purchases from the export sector (1.2 Mil MT) and the industrial sector (8.6 Mil MT). Said tonnage is the lowest level of business carried out for a new campaign in the last 3-year period, although considering the drop in production as a result of the drought, trades reach 24.5% of the projected harvest, just 1.1% below the average of the last 5 years.
In the international context, the Russian-Ukrainian crisis affected the prices of coarse grains due to the importance of these two countries in world trade. In addition, in recent days the Ukrainian consulting firm APK-Inform stated that the expected planting area with spring cereals could decrease by up to 39% if the conflict is not defused in time, while Russia exports of maize and other cereals are restricted until June 30th. As reported by Masha Belikova for Agricensus, there is still room to manage spring crops in Ukraine, since “spring planting of maize, sunflower, SB and rapeseed usually starts at the end of April and lasts until June”, but given the current conditions, “it is uncertain how much of the region could be planted.” The regions most affected by the conflict are Kyiv, Sumy, Donetsk, Lugansk, Kherson, Mykolaiv, and Chernihiv, where Russian troops are actively involved in military operations against the defending Ukrainian forces. Thus, given the worst-case scenario in which all affected areas will not be available to complete spring planting, the total volume could amount to 36% of the total production of maize, 48% of spring barley, 24% of SB, and 44% for sunflower”.
In this context, maize reached its highest levels in over 9 years in Chicago, trading around 300 USD/MT on March 11th, that is, 10% below the historical maximum of 330.2 USD/MT registered on August 21st, 2012. Similarly, the largest SB contract traded in Chicago also reached a 9-year maximum, reaching 621 USD/MT on March 1st, just 4.4 % below the historical maximum of this series (649.7 USD/MT) of September 4th, 2012. However, in recent days these two grains have retracted from these values, mainly as a consequence of the progress of negotiations between Ukraine and Russia.
Regarding Argentine export prices, hand in hand with the harvest progress, local origin values are below other relevant origins such as the United States and Brazil, improving export competitiveness of grains–especially for SB, since for maize, while the balance volume is not revised, the bulk of the exportable quota for the new campaign has already been filled. Indeed, the FOB values of Argentine maize remain in a price range 7.5% lower than that of their origination competitors.
For its part, the international values of SB climbed to ranges not seen since 2012, and here too Argentina maintains a comparatively competitive profile. Starting with the largest exporter of SB, Brazil, the prices of Paranagua port on March 8th, 2022 were 696 USD/MT, although it is still relatively far from the maximum value of 797.6 USD/MT on September 4th, 2012. For its part, the US found its maximum historical export value of the oilseed, with 691.1 USD/MT on March 10th, while Argentina was in the 674 USD/MT range between the last days. As in the case of maize, domestic SB prices were between 17 and 22 USD/MT below the prices of other exporting countries. However, in recent rounds, the values of other bidders have tended to fall, while Argentine prices have remained stable.
This way, although the data indicates a clear influence of geopolitical conditions within the commodity market, Argentina maintains, as has historically happened, high competitiveness in terms of export prices of agricultural goods.
Source: https://bcr.com.ar/
Photo: REUTERS/Stringer
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