Argentina: Barley crop development remains good
Argentina’s barley crop development remains good based upon rains 3-4 weeks ago but the weather has turned dry again. Further, the forecast remains dry for the next week, RMI Analytics said in a report earlier this month.
Despite the drying trend, RMI’s Argentine crop forecast remains at 4.59 mln tonnes, based upon the very good development up until now. If the dryness conditions extend, there would be yield impacts which reduce the crop size.
Wet conditions in Brazil continue to be monitored as more rain is forecast.
Farmer selling of barley in Argentina remains very low, estimated at 8% of the total crop 2023 production, which is very low historically. One major factor remains regarding the steady devaluation of the peso, and to address this problem, a new special USD-peso exchange rate (500 pesos/USD versus the unofficial rate of 1000) has been introduced earlier in October by the government.
This has been done before for barley and other crops, and has been mostly successful in triggering farmer selling. Increased farmer selling should lead to an increase in exports, which brings back hard currency and export tax revenue for the government.
Argentina barley prices are down slightly for malting barley in alignment to the global price direction. A very quiet market exists currently, with no farmer selling, although the special exchange rate may bring much needed liquidity. From an end-user perspective, buying interest is being expressed below current market price indications. As a result, traders are reluctant to sell short without farmer participation and trade is not taking place at the moment, the analysts said.
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