Update 1-Argentine Farmers Plant More Soy, Shun Corn Amid Political Uncertainty

November 22nd, 2019


Category: Grains

(CNBC) – Argentina’s government and the country’s main grains exchange increased their soy planting estimates on Thursday, as growers hedge against political uncertainty by shifting toward oilseeds, which are cheaper to grow, and away from more expensive corn.

Argentine President-elect Alberto Fernandez, set to take office on Dec. 10, has said little about his farm policy plans.

But growers and exporters say they are expecting the center-left Peronist politician to increase soy and corn export taxes.

His running mate was ex-Argentine leader Cristina Fernandez de Kirchner, now set to become vice president. She feuded non-stop with the farm sector during her 2007-2015 administrations, after slapping strict limits on the export of wheat and corn and taxing international soybean shipments at 35%.

To lower their risks as the new government gets ready to take control, some growers are making last-minute changes to their 2019/20 planting program, shifting toward cheaper-to-cultivate soy while reducing planned corn sowing area. “Soy planting area has grown thanks to a reduction in planned corn sowing,” the exchange report said. It added that 31.3% of this season’s soy has been planted so far. The exchange estimated soy area at 17.7 million hectares (43.7 million acres), up slightly from its previous 17.6 million-hectare forecast. Commercial-use corn was also punished by bad weather, it said.

“Water reserves in the west of the provinces of Cordoba and Buenos Aires are mediocre. This situation forces us to decrease our corn sowing projection by 100,000 hectares to 6.3 million hectares,” the exchange’s report said. “To date, 45.7% of estimated corn area has been planted throughout the country.”

The Agriculture Ministry, in its monthly crop report, said it expected 17.2 million hectares to be planted with soybeans this season, up from its previous 17.1 million hectare forecast.

The ministry also said it estimates Argentina’s 2019/20 wheat crop at 19 million tonnes. Harvesting of the crop has already begun and expected to continue through January.

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