The United States Department of Agriculture and the department’s attaché in Buenos Aires differ widely on predictions for Argentina’s 2019-20 soybean ending stocks.
Why it matters: Argentina is a significant soybean producer so its ending stocks could have implications for prices on international markets.
Although dry conditions have continued to be a concern, especially in the provinces of Buenos Aires, La Pampa and Cordoba, USDA attaché Benjamin Boroughs, pegged 2019-20 soybean production at 53 million tonnes, on almost 44.5 million acres, up slightly from the USDA’s estimate of 43.2 million, but with a small decrease in yields.
However, the USDA and Boroughs offered widely differing views when it came to ending stocks, with the USDA’s forecast of almost 6.6 million tonnes compared to Boroughs’s call for 11.1 million tonnes in ending stocks. The attaché blamed the differences on larger beginning stocks, imports and total supply combined with less domestic consumption and a smaller crush.
That smaller crush has a direct correlation to the financially troubled Vincentin. The largest crusher in Argentina shut down operations at some of its facilities in December. Along with selling off assets and restructuring its debt, Vincentin has been seeking financial help from the center-left government of President Alberto Fernandez. Boroughs didn’t state if the company received a reply from the government.
Argentina’s soybean complex may face more changes caused by a 30 per cent increase in export taxes on soybeans, soybean oil and soymeal and a nine percent increase for other agricultural products on Dec. 14, with further increases approved in the event of an emergency.
Prior to Fernandez being sworn in, Argentine soybean growers marketed a large portion of their crops in anticipation of the tax increases.
At this time, it’s unclear whether the government will honour the previous tax rate for those soybeans or not, the attaché’s report stated.