South America: Argentina barley production forecast unchanged at 5.4 mln tonnes so far

Dry conditions in Argentina are building some concern as planting is trying to roll out, RMI Analytics said in their late June report.

Uruguay seeding is nearly complete and rains in Brazil (although heavy) should benefit the already planted crop.

Argentina barley production forecast is unchanged at 5.4 mln tonnes with potential to move higher but moisture is needed to support early crop development. For farmers, barley remains slightly more favourable than wheat, the analysts said.

Argentina’s farmers remain concerned about a rumoured increase in wheat export taxes (the government is concerned about wheat export volumes, and also pursues higher tax revenues); barley will be viewed more favourably by farmers if taxes go up and barley area could increase, the experts said.

For crop 2021, China shipped 2.6 mln tonnes of the 5.2 mln tonnes of Argentina barley available, and this heavy shipments pace is expected to continue, with 1 mln tonnes (FAQ) of crop 2022 already licensed for export (little malting barley).

With farmers having already sold considerable amounts of feed barley from crop 2022, current liquidity is low and malting premiums are not motivating farmers (so far) to sell malting. Currency depreciation is another factor holding back farmer selling (e.g. holding physical grain as a currency hedge).

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