Argentina’s corn reserves extend year-round export presence
The presence of huge corn stocks in ArgentinaвЂ™s market are likely to extend the countryвЂ™s export season much longer than usual...
The presence of huge stocks in Argentina’s corn market are likely to extend the country’s export season much longer than usual, and potentially make it a year-round presence, trade sources told Agricensus on Thursday.
Low water levels are preventing ships from loading full cargoes, and another huge harvest means the country has reported its largest ever corn stocks in July – a situation that is only likely to swell through August as the harvest wraps up.
“We do have plenty of corn for exports and Argentina will need as many vessels as possible… demand is coming hand to mouth, and carries for deferred positions end up disappearing,” one Argentina-based source said.
Recent buying from South Korea’s feed sector, looking for cargoes to arrive in November, was sold basis South American origin at a time when US volumes could normally have been expected to be more competitive.
Line-up data from the Nabsa maritime agency suggests some 2.9 million mt of corn is expected to load from Argentina’s ports in the next month – around 58% of which is expected to load in Up River locations such as San Lorenzo or Rosario.
The hub has been hit hard by a lack of rainfall, which has caused a significant drop off in water levels in the Parana river and means bulk carriers are now only able to load between 60-70% of their normal cargo, forcing them to stop off in other locations to complete the loading.
That has switched operations away from the Up River hub and towards the bigger, deeper Atlantic ports like Bahia Blanca and Necochea – but the country’s corn prices remain competitive despite the extra costs involved as stocks mount.
“Up River stocks are a big issue and forcing people to price more panamax business. Argentina (exports) should push into October and slow down drastically,” one Singapore-based source said.
That means Argentinian volumes should remain competitive for deliveries into Asian destination markets for late December arrivals.
Last week, government data suggested corn stocks in July had jumped to 17.4 million mt for feed corn and over 18 million mt for all corn – a record in recent years.
Data from the Buenos Aires Grains Exchange (BAGE) suggests that the harvest for this year’s crop is already almost 95% complete and production is likely to come in at 51.5 million mt, while early indications suggest the country could expand its planted area next year.
BAGE expects the area to rise to 7.1 million ha in the new season, a 7.5% year-on-year increase and teeing up expectations of a huge production – all of which is likely to boost the country’s potential as an all-year-round exporter.
“We’re actually seeing Argentina exporting all year through… and this trend will continue – of course, the December and January programme gets slimmer,” a second Argentina-based source said.