Soybean production in Argentina is expected to fall 3.6% to 53 million mt in 2019-20 marketing year (April-March) as higher corn margins drive a 1% decline in the country's bean-planting area to 17.8 million hectares, according to US Department of Agriculture.
Marketing year 2019-20 soybean exports are forecast to increase 4% year on year to 12.5 million mt due to greater exportable supplies and current trade conditions delivering higher returns for bean exports than for soybean meal and oil, the USDA said in a report.
Argentina is the world's third-largest soybean grower and the top soybean meal and oil exporter.
The soybean crush for Argentina in marketing year 2019-20, is seen to decline 1% year on year to 41 million mt because current trade conditions favor greater exports of whole soybeans instead of further processing it, USDA said.
"Another factor influencing this decline is the recent removal of the export tax differential between whole soybeans and soybean products," the USDA said. "This differential equaled 3% points and facilitated the rise of crush sector in Argentina over the past two decades. However, its (tax) removal has significantly hurt crush margins, lowering the sector competitiveness."
The 2018-19 marketing year crush forecast is revised down 8% from the USDA's March estimate, to 41.5 million mt, the result of current market conditions that cut incentives for soybean processing expansion, the report said.
"2019-20 marketing year soybean oil exports are forecast to fall 2% on year to 5.4, while soy meal exports fall 1% to 30.2 million mt," the USDA said. "While a greater proportion of beans are being directed to export, Argentine crushers are maintaining crush levels by importing beans from Paraguay, Brazil, Uruguay, and the US and processing them into soy oil and meal for foreign market."
