Argentina: Barley harvest results reported as generally favourable

Although rain interrupted harvest across Buenos Aires province, the barley harvest result is generally favourable, RMI Analytics reported earlier in January.

Yields are very good, with reports of 7 tonnes/ha in areas of the south east but yields are much lower in the west and northwest. Still, the analysts’ production estimate is raised to 4.75 mln tonnes. Also, the quality reported in mostly favourable with proteins slightly lower than expected and some minor pre-germination present.

Farmer selling remains well behind the same pace as last year due to the ongoing difficult economic conditions, with less than 30% of the crop sold by farmers. Sales that have been made are predominantly feed/FAQ, not malting barley. The impact of the currency devaluation in December is lessened, as the spread between the official peso and unofficial peso is widening out again. This adds to the farmer disinterest in selling barley (or any crop).

A break is extremely wet conditions in Uruguay and Brazil allowed harvest to conclude, but the final quality result is awaited and there are quality challenges to manage.

For FOB prices, the market is softer for malting barley and unchanged for feed/FAQ, with most trade discussion focused upon feed/FAQ barley at the moment. The buying ideas are below the levels outlined (e.g. malting barley at USD280/tonne or below). With farmer selling very low, the trade is reluctant to sell at these lower levels and in response FAS prices are up slightly, in an effort to spark further farmer selling. It is encouraging that buying interest is present (for feed/FAQ in particular), but the lack of farmer liquidity is a limiting factor. It is speculated that the new Milei government could increase export taxes from 12% to 15%, which could result in a lowering of farmer bids if enacted.

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