Argentina: Barley crop forecast down on concern over planted area
Moisture conditions ahead of planting season are improving with more rain received in southern Buenos Aires province while rains continue to miss the drier, more northerly regions which need it the most, RMI Analytics said in their early May report.
The analysts’ barley crop 2023 production forecast is down 0.1 mln tonnes on increasing concern barley planted area will struggle to compete versus wheat. RMI Analytics’ crop 2022 estimate is up 0.1 mln tonnes to 3.9 mln and exports increased to 2.5 mln due to higher export licence declarations. The government’s special barley exchange for feed/FAQ/ barley has sparked farmer selling of 300 thousand tonnes of crop 2022 in just 10 days.
The special barley exchange rate is 33.6% higher than the official exchange rate but is fixed until August in peso terms, which means the benefit of the special rate devalues daily as the peso continues to depreciate. This is the reason behind the jump in farmer selling, the analysts said.
Planting is starting in northern regions (which are dry) and will begin in about 15 days in southern Buenos Aires province. Fertilizer and other inputs are mainly imported (in USD), making supply more problematic due to local economic conditions. Farmers have tough cropping decisions to make over the coming weeks. Ending stocks are very tight going into crop 2023.
Argentina barley prices are generally lower but the market is extremely ill-defined due to the number of variables involved. Feed barley is sharply lower as farmer selling linked to the Special Barley Exchange Rate weighs on prices. Malting barley prices have spread to nearly USD100/tonne over feed/FAQ, with limited interest to buy or sell at these levels. The dryness in the north has both farmers and traders concerned as planting begins to roll-out.
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