Argentina: Barley crop forecast up on good planting pace
As planting begins to roll forward, the weather in Argentina is nearly ideal with clear conditions and rain in the forecast. Farmers are pushing planting to get seeded ahead of the rain. Planting progress has advanced to 20% for barley (and wheat is the same). The rain could delay soybean and corn harvest which may slow the seeding pace as a result, RMI Analytics said in their early June report.
The rally in wheat prices is a potential risk to barley area, as wheat prices are higher, but the current expectation is farmers remain with their normal crop rotation.
RMI’s crop 2024 production estimate is increased 0.1 mln tonnes to 5.0 mln, on the basis of a good planting pace and a favourable soil moisture profile (and more rain in the forecast). Farmer selling remains very low by historical standards, crop 2023 estimated at 60-65% sold, leaving 1.7-1.8 mln tonnes to still sell as old crop. In addition, the selling of crop 2024 has been very low (so far), with less than 300 thousand tonnes sold by farmers. That leaves 6.5 mln tonnes of barley to be sold for crops 2023 & 2024.
Prices are generally softer as wheat prices come off from the recent high, but malting barley is still struggling to maintain local competitiveness with wheat. For feed/FAQ barley, the wider price spread to wheat makes it more challenging to compete, and this is a small risk to planted area if farmers start to doubt FAQ’s competitiveness. On a macroeconomic level, Q1'24 data showed a slight rebound was taking place in the broader economy which was favourable, but has been followed up by a difficult April/May. An improving economy supports the farmers’ expectation of a further currency devaluation, and an elimination of export tariffs, the analysts said.
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