Argentina: Barley crop forecast increased as conditions benefit from further rains
Argentina’s barley crop conditions have benefitted from further rains, at least in the eastern half of Buenos Aires province. Although improved, the area of dryness in western Buenos Aires province and north to Santa Fe and Cordoba regions. Clearly, these areas are in need of more moisture during the growing season, RMI Analytics said in their early August report.
Seeding is now completed, and though a bit later than ideal, there is currently sufficient moisture for early crop development. On the back of this, RMI Analytics’ production forecast for Argentinean barley is increased slightly to 4.59 mln tonnes.
Even with an increased production, the analysts’ export volume forecast is also increased due to the tightening global availability of two-row spring malting barley. This causes ending stocks to decline slightly.
Farmers have been pleased with the yields from second corn crop which is harvesting at the moment, and selling of corn has been aggressive with 6 mln tonnes sold under the current ‘Special Exchange Rate’ implemented on July 24th.
From a barley perspective, this could make it increasingly more difficult to spark farmer selling of barley (especially malting) at this stage, as farmers’ need for cash is low following the sizeable corn selling. Argentina farmers have a number of local factors to consider: upcoming election, tough economic conditions, export tax uncertainty, and a high probability that a peso devaluation is coming soon (forward peso values indicate a dramatic devaluation).
Farmer selling of barley remains non-existent and with that trade is limited. Prices are mostly unchanged (so far) despite the strength seen globally. FAS prices are down slightly, mainly due to a lack of trade from neither farmer or buyers.
RMI Analytics’ supply and demand estimate also includes an increase in exports to 3.3 mln tonnes, driven by an expectation of world trade (e.g. China) requiring considerable barley from Argentina given the world barley balance sheet. This leaves ending stocks below crop 2022 levels, if realized.
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