Growth in Argentine soya cultivation will outpace that of chief rival corn in the upcoming season, to be planted over the two months ahead, prompting forecasts of a record soyabean crop spurred by relatively cheap production costs. Corn and soyabeans, along with derivatives such as soyaoil and soyameal, are Argentina's main agricultural exports at a time of rising global demand. But in the country's vast Pampas farm belt, there is no doubt about which crop is favoured by growers.
"Soya area will hit 20 million hectares," said Gustavo Lopez, head of the Agritrend consultancy. That would be higher than the current season's 19.5 million. The recently-harvested 2012/13 crop is forecast at 49 million tonnes by Lopez, who says the 2013/14 harvest could reach 55 million tonnes. That would easily beat Argentina's record 52.7 million tonnes reached in 2009/10.
Argentina's is the world's No 3 corn and soyabean exporter, as well as it top supplier of soyameal livestock feed and soyaoil, used in the booming international biofuels sector. The United States Department of Agriculture (USDA) sees a 53.5 million tonne soyabean crop for Argentina in the upcoming crop year, up from the 50.3 million tonnes expected from the recently-completed 2012/13 harvest.
The department sees Argentina's 2013/14 corn take at 27 million tonnes, which would also be a record. But corn sowing in the South American grains powerhouse is restricted by relatively high growing costs. The country's record corn crop, according to the agriculture ministry, was the 23.8 million tonnes collected in 2010/11. Lopez predicted an area between 4.2 and 4.3 million hectares for corn in the 2013/14 season, a touch below the 4.5 million hectares sown with corn in 2012/13. He sees a 2013/14 harvest of 25 to 26 million tonnes, about the same as what he expects for the current crop year.
More than 93 percent of the 2012/13 corn harvest is already in the bag, according to the Buenos Aires Grains Exchange. International prices play a big role in soya's relative popularity among Argentine growers. Chicago corn prices were close to three-year lows when bargain buyers entered the market on Tuesday to lift the font-month contract by 1.4 percent. Benchmark soya prices have also fallen this year, but not by as much as corn.
Soyabean for August delivery closed Tuesday at $496 per tonne on the Chicago futures market. The overriding factor in Argentina is that the cost of growing soyabeans is lower than that of soya. Soya requires less fertiliser, less expensive seeds, less care during the growing season and the cost/benefit ratio of trucking soyabeans to port is more favourable as soya is lighter and brings a higher price.
According to the BLD consultancy, based in Argentina's main grains hub of Rosario, the cost of corn production in the 2012/13 season was $1,437 dollars per hectare versus $1,051 per hectare for soya. The Rosario grains exchange says the cost of corn growing is actually double that of soya. "With soya the benefit is greater and the risk is lower," the exchange said in a recent report.