Mar 09, 2023

USDA Slashes Argentina Crop Production

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Hot and dry conditions during February and early March continued to take a toll on soybean and corn production in Argentina. In their March World Agricultural Supply and Demand Estimate (WASDE), the USDA significantly reduced their estimates for the 2022/23 soybean and corn production in Argentina.

The 2022/23 soybean production in Argentina is now estimated at 33.0 million tons which is down 8 million tons from the 41.0 million estimated in February. The 2021/22 soybean production in Argentina was 43.9 million tons.

The 2022/23 corn production in Argentina is now estimated at 40.0 million tons, which is down 7 million tons from the 47.0 million estimated in February. The 2021/22 corn production in Argentina was 49.5 million tons.

Everything that could go wrong has gone wrong this growing season in Argentina. Argentine crops in 2022/23 have endured the worst drought in over 60 years, record high temperatures, record low temperatures and even localized frost in the middle of summer.

Even at these lower production levels, these estimates may be lowered even further in subsequent reports. Private market analysts already have lower production estimates compared to the USDA. The early corn harvest has started in Santa Fe and Entre Rios with yields reported to be below expectations. The early soybean harvest is expected to start soon with farmers in the core production areas expecting soybean yields to be down as much as 50%.

Argentina is the largest soybean meal and soybean oil exporter in the world and soybean crushers are reporting that they cannot source enough soybeans to keep their operations functioning properly. Therefore, they have already imported significant amounts of Brazilian soybeans with more imports expected in the coming months. They have also bought-back some of their contracts for meal and oil due to a lack of available soybeans to crush.

For their part, Argentine farmers are expected to be reluctant sellers of their dwindling grain supply in the hope of higher prices to offset their production losses.