Argentina: Barley crop forecast unchanged at 5.2 mln tonnes

Barley crop conditions have improved further from good rains across key growing areas of Chile, Argentina, Uruguay, and southern Brazil. There are reports of some minor disease presence in parts of Buenos Aires province, which indicates the level of moisture in the crop. Conditions are expected to clear which would be positive at this stage, RMI Analytics said in their latest report.

The analysts’ production estimate for Argentina remains at 5.2 mln tonnes which aligns closely to local estimates in the 5.0-5.2 range. At 5.2 mln tonnes, Argentina’s production would be at the top end of the past 11 years due to this positive crop view.

Exports are expected to decrease slightly in crop’24 as shipments to China decline and replacing those volumes will require expanding into new markets (e.g. Mexico) or pursue feed barley sales into the Middle East market.

The market remains quiet as competition in global trade is very strong, led by Australia who captured the recent barley tender for South Africa and Mexico. In old crop, buying interest remains for small lots of old crop barley, shipment Oct./Nov.’24 but this barley sits on-farm (e.g. silo bags). Thus, a small price premium remains for crop’23, while crop’24 is lower in both FOB and FAS terms in an effort to remain competitive globally.

Farmers’ selling remains low, with only ~10% (530 thousand tonnes) of crop’24 sold at this stage, of that 95% is malting barley, due to the wheat market price spike in May, which prompted farmer selling. Otherwise selling has been very low, making this the second consecutive year farmers are extremely reluctant to sell barley prior to harvest. The result is severely limited market liquidity and therefore makes trader’s participation in new business extremely difficult (without selling short).