The attaché’s report reduced the estimate for planted acreage to 16.3 million hectares, saying dry conditions discouraged planting by farmers who were, until very late in the season, hoping for rain.
In addition, the outlook predicts soybean yields for MY 2022/23 in the Latin American country will be the lowest in almost 50 years: “In the core production areas of Argentina, this is the worst drought in more than 70 years.”
Argentina will need to import a record 11 MMT of soybeans, due to drought conditions, to achieve a crush of 29.5 MMT.
“In recent years Argentina has crushed about 40 MMT per year and has a theoretical annual capacity greater than 65 MMT. These imports will primarily come from Paraguay, Brazil, and Bolivia, but depending upon global supply and demand, could come from as far afield as the US.”
This reduced crush would lead Argentina to export only 18.75 MMT of soybean meal (SBM), potentially losing its position as the world's largest exporter of that critical feed raw material.
The US Department of Agriculture (USDA)’s April WASDE reduced Argentina’s soybean output by 2 MMT from the previous estimate to 27 MMT, which came in well below market expectations.
Sunflower is a bright spot
Argentina’s soybean oil exports are estimated to hit 3.65 MMT, while sunflower seed production is predicted to remain 4 MMT, found this latest USDA FAS publication.
“While international prices for soybean oil have declined dramatically since the high levels reached after the Russian invasion of Ukraine, the combination of low input costs and resistance to the drought have made sunflower a bright spot for Argentine farmers in an otherwise difficult year.”
For MY 2023/2024, the attaché projects a recovery in soybean production on higher planted acreage and a return to normal weather conditions, with output projected to reach 50.5 MMT.
