Argentine Soybean Sales Slump Despite Bumper Harvest

Despite a near-record soybean harvest in Argentina, domestic sales have slumped in June, according to a new report from the Rosario Grain Exchange (Bolsa de Comercio de Rosario).

The report reveals that daily soybean trade volume in the local market averaged 87,300 tons so far in June, a significant 51% drop compared to the 177,300-ton average seen in May. This decline in trading activity comes despite an estimated total soybean production of 50 million metric tons, exceeding both last year's figures and the long-term average.

The Rosario Grain Exchange attributes this unexpected trend to several factors. "After the seasonal peak of soybean business observed during the past month, there is currently less commercial dynamism," the report states.

One contributing factor is the recent performance of soybean prices on the Chicago Board of Trade, which have weakened in light of positive crop conditions in the United States. This has potentially shifted market attention and incentivized Argentine farmers to prioritize corn sales as the late corn harvest gets underway.

Adding another layer to this dynamic is the significant volume of soybean imports into Argentina. Despite the robust domestic harvest, the country imported 3.4 million metric tons of soybeans during the first five months of 2023, with Paraguay serving as the primary supplier.

Meanwhile, the Argentine corn harvest is gaining momentum, with 67% of the planted area already harvested as of last week. "In this way, business growth is expected to continue as the late corn harvest progresses in the coming weeks," predicts the report.

Looking internationally, the report highlights the impact of recent weather events on US crops. Although a heatwave initially raised concerns, subsequent storms and flooding have somewhat mitigated the impact. However, with 67% of US soybean crops and 69% of corn crops rated as good to excellent, the market is anticipating a substantial US harvest. This expectation has contributed to the recent downward pressure on soybean and corn prices in Chicago.