Corn and soya exports from South America during 2010 are set
to increase strongly. Good weather in recent months, benefiting
this season’s crops, has prompted upwards revisions to forecasts
of foreign sales. The region’s overall exports may be 15mt
(million tonnes) above last year’s total, a very large addition.
This improvement could reverse most of the downturn seen
in 2009. Crops of corn and soyabeans in Argentina and Brazil
were severely damaged, last year, by excessively hot and dry
weather during the growing season, greatly reducing yields.
Export availability, especially in Argentina which experienced
particularly dramatic crop problems, declined abruptly.
In the season which has already begun, handling of these
commodities at South American loading ports is expected to be
brisker than seen 12 months earlier, as new crop supplies are
vigorously marketed. A substantial boost for bulk carrier
employment in key long-haul export trades to Europe, China and
other Asian destinations, as well as to many other markets
around the world, will be a feature of freight market activity.
A BRIGHTER PERSPECTIVE
In the current 2010/11 year, exports of wheat, corn and other
coarse grains, plus soyabeans and meal, from Argentina and Brazil,
could total 105.8mt, as shown by the table below. This estimate
is 14.3mt or 16% above the previous year’s volume, reversing a
large part of the 18mt decline which occurred then.
Several separate US Dept of Agriculture forecasts published in
mid-April have been combined to calculate the overview. These
USDA estimates, for wheat, corn, sorghum, soyabeans and
soyameal are based on slightly differing marketing year periods,
reflecting the varying timing of harvests. As a result, the overall
total is an approximate figure.
The most noteworthy change envisaged, compared with last
year, is the huge improvement in Argentina’s performance. Soya
exports from Argentina could be 52% higher, reflecting an
increase of over two-thirds in this year’s soyabeans harvest, while
corn exports rise by 18%.
PROSPECTS FOR WHEAT AND CORN
Wheat is now only a minor part of the region’s export picture,
but harvesting of the crop is significant as it starts South
America’s annual cereals and oilseeds production cycle. In the
harvest completed in early 2010, Argentine wheat output totalled
9.6mt, a 5% reduction. Exports in the marketing year ending
November 2010 could be down by 2.8mt (41% ) at 4.0m.
By contrast, corn and sorghum output in Argentina’s current
harvest is put at over 25mt, a very large 51% jump from a year
ago. Favourable weather and excellent growing conditions have
been highly beneficial. Although foreign sales are not expected to
see a proportionate expansion, exports in marketing year 2010/11
ending February 2011 may increase by 2.0mt (18%), to 13.2mt.
Wheat exports from Brazil are likely to remain small, at under
1mt, but corn exports could increase sharply. Brazil’s annual
production of corn, derived from two crops (the summer-season,
and second-season crops) is estimated at 53.5mt in 2010, a 5%
rise. During the marketing year ending March 2011, corn
exports are forecast to expand by about 12%, totalling 8.0mt.
SOYABEANS AND MEAL OUTLOOK
The soya sector is a much greater focus of attention as volumes
handled by South American ports and transported by bulk
carriers are far larger. Soyabeans and meal exports from the
region reached a peak exceeding 76mt in the 2007 season, since
when two consecutive annual declines have been seen, including
last year’s fall to 66mt. Consequently, the upturn to 80mt
forecast for 2010 is an impressive recovery.
Soyabeans output in Brazil may be about 17% higher in the
latest harvest, at 68mt. But the larger improvement in
Argentina’s production and exports is likely to act as a restraining
influence on Brazilian sales to foreign markets. USDA analysts
estimate that, after totalling 40.0mt in marketing year 2009/10
ending January 2010, Brazil’s soyabeans and meals exports could
see only minimal 1% growth to 40.6mt in 2010/11.
Argentina apparently has achieved a remarkable production
rebound. A record high crop area, 18% above last year’s area, is
assisting, accompanied by much higher yields as a consequence of
better weather. These changes could raise the soyabeans harvest
by 22mt (69%), from a depressed 32mt in 2009, to an estimated
54mt. Exports of beans and meal in the marketing year ending
March 2011 are expected to total 39.4mt, a 13.5mt (52%)
SOLID GLOBAL IMPORT DEMAND
South American exporters are strongly positioned to expand
their sales this year. The global market for corn and other coarse
grains currently seems well supported, unlike the wheat market
which is experiencing large cutbacks by a range of importing
countries. In the soya sector, import demand around the world
still appears to be on a rising trend.
Prospects for global grain and soyabeans/meal trade beyond
the end of September 2010 are still rather hazy. Activity from
the third quarter of this year onwards will be determined partly
by summer domestic grain and beans harvests in northern
hemisphere importing countries. But there have been no signs
yet of weakness emerging.
Soyabeans and meal import demand remains firm, amid
buoyant purchases by China and European countries. USDA’s
latest estimates for the current year suggest that China’s soya
imports will increase by 6%, reaching 43.6m, while other Asian
countries may raise their volumes. The European Union’s
imports could be 4% larger at 35.4mt.