Argentina soybean cargoes competitive despite drought

Two cargoes were sold FOB Up River on Monday, believe to be some of the first cargoes to be exported from Argentina’s new crop.

The cargoes were for loading May and June, with the May cargo priced at 72 cents above July futures, equating to around $408.25/mt FOB on Monday.

With Brazil cargoes valued at above 100k for May loading ($415/mt) and US Gulf cargoes at 70k ($404/mt), Argentinian product was said to be "competitive" due to the fact freight from Argentina to Northeast Asia is around $7/mt more expensive than the same route from Brazil and $2/mt cheaper than from the US.

Argentinian soybean exports are expected to be significantly lower in the 2018/19 marketing year due to a drought that has scorched the crop.

Trade analysts now expect production to reach 40 million mt or even lower, down from 57.5 million mt last year.

The USDA expects exports to fall to 6.8 million mt from 7 million mt last year, although local brokers told Agricensus they expect the actual figure to be closer to 4.5 million mt.

Farmers have already sold forward 4.1 million mt to exporters out of a total of 12.8 million mt forward sales, with brokers suggesting that figure may not rise.