Argentine Soybean Harvest Seen at 30 MMT

BUENOS AIRES - May 9/02 - STAT -- The U.S. agricultural attache is going with the official production estimates for Argentine soybeans, with both entities now looking for the harvest to total 30 million metric tons (MT), up from 27.8 million MT last year.

In raising its estimates, the U.S. agricultural attache said, "Wet weather during early April raised concerns, but drier weather since then has allowed a rapid resumption of the harvest. Reports of diesel shortages do not, thus far, appear to have had a significant negative impact on the harvest."

Soybean area is expected to increase next year to 12.2 million hectares (which will be planted starting in late October 2002), up 700,000 hectares from the current crop. Yields are expected to fall somewhat from the current excellent crop to around 2.5 tons per hectare, due both to lower input use and to a return to more normal yields.

Soybeans have the large advantage of being relatively profitable and lower cost (thus needing less credit) than competing crops. Planting soybeans costs roughly US$ 100 per hectare, and even less if farmers used saved seed (which is legal in Argentina) and limit chemical use to Round Up herbicide (US$25 per hectare or less).

Purchases of soybeans by exporters were severely disrupted in the second half of April. The initial disruption was the announcement that the export tax increase that was implemented April 9 would be applied retroactively (a measure that was quickly repealed after all trading stopped).

Trading continued to be disrupted by a bank and exchange holiday, followed by a 3 day farm organization strike. Trading is expected to be more normal in the upcoming week, with reports that the Buenos Aires Grain Board may reopen futures trading in the middle of the week.

Even so, exports are expected to advance from last season's 7.5 million MT to around 8.2 million this year and a potential 8.5 million MT during 2003, if next year's harvest reaches 29.5 million MT from a projected 12.2 million hectare seeded area.

Argentina's domestic crush is expected to climb from 19.49 million MT last season to around 21 million MT this year. This would see ending stocks climb from 490,000 MT at the start of the season to a possible 530,000 MT by the close.