Oilseeds and Products Update

An Expert's View about Cereals, Leguminous Crops, Oil Seeds in Argentina

Posted on: 9 Nov 2012

FAS Buenos Aires makes no changes to the official USDA area and production estimates for soybeans and sunflowerseed for the marketing year 2012/13.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 9/21/2012 GAIN Report Number: Argentina Oilseeds and Products Update Lock-up Report Approved By: Melinda Sallyards Prepared By: Brooke Markley Report Highlights: FAS Buenos Aires makes no changes to the official USDA area and production estimates for soybeans and sunflowerseed for the marketing year 2012/13. Soybean area and production is expected to reach 19.7 million hectares and 55 million metric tons, respectively. Sunflower area and production is estimated at 2 million hectares and 4 million metric tons, respectively. Peanut area is estimated at 325,000 hectares with production reaching 1.2 MMT, slightly lower than the official USDA estimates. Post: Commodities: Buenos Aires Oilseed, Soybean (Local) Oil, Soybean (Local) Meal, Soybean (Local) Oilseed, Sunflowerseed Oilseed, Peanut Author Defined: Soybeans: Marketing year (MY)2012/13 is expected to be a record year for soybean production. After two hard years with dry weather and big losses, production is expected to reach 55 million metric tons (MMT). Early weather predictions of an “el niño” year with cooler weather and more rain are already proving to be true. August showers for 2012 soared above historical rainfall during the same month. The chart below shows rainfall in millimeters registered for August by delegation. Source: Ministry of Agriculture weekly report, September 6, 2012 Excessive rains have caused flooding in many areas of central, southern and western Buenos Aires province. It is estimated that more than 10,000 hectares are under water but more than two-thirds of this is in the cattle producing region, not on crop land. It’s still too early to tell whether or not the crop land that is affected by the flooding will cause delays in planting. So far, it has been a welcomed change and has left the majority of the country with adequate soil moisture for crops. Several sources indicated that soybean planted area may increase as the season goes on. Many producers wait until the last minute to decide which crop to plant based on land rental prices and commodity prices. Instead of corn or peanuts, they may opt for more soybeans. There are still several weeks before soybean planting is fully underway, so it will be something to keep an eye on this season. For MY2012/2013, post estimates exports to be lower than the USDA official estimate, 11 MMT compared to 13.825 MMT. Since there have been policy changes from the government with the goal to provide incentive to the crushing industry and promote crushing at full capacity, it is likely that more soybeans will be crushed in the coming year. Post maintains its crush estimate at 42 MMT (3.2 MMT above the USDA official number). Soybean oil and meal production are also up, based on the increased crush estimate. Sunflowerseed: Sunflowerseed planting for MY2012/13 has begun in the northern provinces of Santa Fe, Entre Rios, Chaco and San with nearly a quarter of the total intended area planted. The rains have helped, leaving good soil moisture for planting. FAS Buenos Aires estimates total area to be planted at 2,000,000 hectares, an increase of about 8 percent from the previous year. Most of the expansion is seen in the north, especially Chaco, where the Ministry of Agriculture estimates a total of 350,000 ha will be planted, nearly 50 percent more than during the previous year. With average yields production is forecast at 4 MMT. Peanuts: Post estimates that 325,000 ha of peanuts will be planted, the same as the previous year. As previously mentioned, many producers wait until the last minute to decide what to plant. High soybean prices will influence many to plant soybeans instead of peanuts. Based on historic average yields, production is forecast at 1.2 million metric tons. Policy: On August 10, 2012, the Government of Argentina announced an increase in biodiesel export taxes from 20 percent to 32 percent. This, combined with the export block of Argentine biodiesel to Spain after the YPF nationalization, led many analysts to lower their estimates of the amount of soybean oil used by the biodiesel industry, some by even 1 MMT. This announcement was not well received by the industry, especially since many producers had invested millions of dollars in biodiesel plants over the past several years. Apparently, their concerns were heard and on September 19, 2012, the government announced a new policy that lowers the biodiesel tax to a variable rate of 17 percent and 24 percent, based on soybean prices. The sliding tax will be reviewed every 15 days and includes a producer guarantee of a 4 percent fixed margin. This softens the blow from the August announcement but still leaves producers with uncertainty regarding what tax rate they will end up paying. In the August 10 resolution a temporary regime to allow imports of soybeans for crushing in-country was also announced. In order to be able to import, crushers must register with the “Authorized Soybean Operators Registry” and prove they have purchased 5 MMT of domestic soybeans for every 1 MMT of imported soybeans. It is reasonable to estimate that a potential 1 to 3 MMT tons could be imported for crushing however, according to local sources, there are still no clear rules on how to register or how to measure the domestic purchase so it is unclear whether or not soybeans will actually be imported this season. For more information, please see the biodiesel reports in the GAIN system. Biodiesel Tax Increase and Temporary Soybean Import Policy Production, Supply and Demand Data Statistics: Oilseed, Soybean (Local) Argentina 2010/2011 2011/2012 2012/2013 Market Year Begin: Apr 2011 Market Year Begin: Apr 2012 Market Year Begin: Apr 2013 USDA Official New Post USDA Official New Post USDA Official New Post Area Planted 18,300 18,300 18,600 18,600 19,700 19,700 Area Harvested 18,300 18,300 17,500 17,500 19,700 19,700 Beginning Stocks 4,507 4,507 4,022 4,010 2,022 2,010 Production 49,000 49,000 41,000 41,000 55,000 55,000 MY Imports 13 13 0 0 0 0 MY Imp. from U.S. 0 0 0 0 0 0 MY Imp. from EU 0 0 0 0 0 0 Total Supply 53,520 53,520 45,022 45,010 57,022 57,010 MY Exports 10,389 10,389 6,500 6,500 13,825 11,000 MY Exp. to EU 35 35 35 35 50 100 Crush 37,509 37,521 35,000 35,000 38,800 42,000 Food Use Dom. Cons. 0 0 0 0 0 0 Feed Waste Dom. Cons. 1,600 1,600 1,500 1,500 1,650 1,650 Total Dom. Cons. 39,109 39,121 36,500 36,500 40,450 43,650 Ending Stocks 4,022 4,010 2,022 2,010 2,747 2,360 Total Distribution 53,520 53,520 45,022 45,010 57,022 57,010 1000 HA, 1000 MT Oil, Soybean (Local) Argentina 2010/2011 2011/2012 2012/2013 Market Year Begin: Apr 2011 Market Year Begin: Apr 2012 Market Year Begin: May 2012 USDA Official New Post USDA Official New Post USDA Official New Post Crush 37,509 37,521 35,000 35,000 38,800 42,000 Extr. Rate, 999.9999 0 0 0 0 0 0 Beginning Stocks 225 225 391 238 251 78 Production 7,148 7,148 6,670 6,670 7,405 8,000 MY Imports 0 0 0 0 0 0 MY Imp. from U.S. 0 0 0 0 0 0 MY Imp. from EU 0 0 0 0 0 0 Total Supply 7,373 7,373 7,061 6,908 7,656 8,078 MY Exports 4,227 4,300 3,790 3,790 4,010 4,500 MY Exp. to EU 275 425 300 300 350 435 Industrial Dom. Cons. 2,385 2,450 2,650 2,650 3,000 3,000 Food Use Dom. Cons. 370 385 370 390 371 400 Feed Waste Dom. Cons. 0 0 0 0 0 0 Total Dom. Cons. 2,755 2,835 3,020 3,040 3,371 3,400 Ending Stocks 391 238 251 78 275 178 Total Distribution 7,373 7,373 7,061 6,908 7,656 8,078 1000 MT, PERCENT Meal, Soybean (Local) Argentina 2010/2011 2011/2012 2012/2013 Market Year Begin: Apr 2011 Market Year Begin: Apr 2012 Market Year Begin: Apr 2012 USDA Official New Post USDA Official New Post USDA Official New Post Crush 37,509 37,521 35,000 35,000 38,800 42,000 Extr. Rate, 999.9999 1 1 1 1 1 1 Beginning Stocks 2,532 2,891 3,501 3,862 3,031 3,392 Production 29,181 29,183 27,290 27,290 30,265 32,750 MY Imports 0 0 0 0 0 0 MY Imp. from U.S. 0 0 0 0 0 0 MY Imp. from EU 0 0 0 0 0 0 Total Supply 31,713 32,074 30,791 31,152 33,296 36,142 MY Exports 27,485 27,485 27,000 27,000 30,120 32,500 MY Exp. to EU 12,658 12,658 12,700 12,700 13,200 15,000 Industrial Dom. Cons. 0 0 0 0 0 0 Food Use Dom. Cons. 0 0 0 0 0 0 Feed Waste Dom. Cons. 727 727 760 760 770 770 Total Dom. Cons. 727 727 760 760 770 770 Ending Stocks 3,501 3,862 3,031 3,392 2,406 2,872 Total Distribution 31,713 32,074 30,791 31,152 33,296 36,142 1000 MT, PERCENT
Posted: 09 November 2012

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