The Latin America Crop Report for July 10, 2017

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The Latin America Crop Report for July 10, 2017

 

By Patrick Archer – SVN | Saunders Real Estate

Argentina Crop News

Argentina total crop production in the 2016/17 cycle is forecast to reach a record 137 million tons or 9.7% more than Argentina produced in the previous cycle, according to a report this morning in Fortuna. The increase is attributed to a 10% boost in corn, wheat and sunflower production which more than offset recent declines in barley and soybean production. Agriculture continues to be the country’s most important export sector accounting for 45.7% of all exports in the first half of 2017 compared to 48% in the first half of 2016. Argentina’s main ag export destinations in terms of dollar value are India (9.8%), Vietnam (9.7%), and China (9.2%). (Fortuna

Syngenta officials are increasingly worried about Argentina’s failure to update the legal framework of the national Seeds Law (Ley de Semillas), according to a Cronista interview with Syngenta general director Antonio Aracre: “No company is going to bring new seed technology (to Argentina) if there is no regulatory framework to protect them. Intellectual property is an outstanding issue which is costing Argentina an estimated 100,000 potential jobs and US$1 billion in new investment.” Aracre says Syngenta, now 97% owned by ChemChina after a US$43 billion deal, wants to be increasingly active in the acquisition of new seed and biotech companies. (Cronista

 

Brazil Crop News

Brazil is now producing so many soybeans, they have no place to store them. That’s the headline of a Bloomberg Mexico article this week detailing the 2017 harvest which yielded 118 million tons, the local 29% collapse in soybean prices (compared to a year ago), and the current storage crisis nationwide. Compounding Brazil’s excess soybean supply situation is the record corn harvest which could exceed 100 million tons for the first time ever. “We are receiving lots of requests for 180-ton silo-bags from producers in Mato Grosso,” says Aprosoja’s Frederico Azevedo. Commonly used in neighboring Argentina for years, this is the first time silobolsas have really covered the Brazilian farm landscape. (Economía Hoy)

A video of a truckload of corn being dumped into an “ocean of corn” in central Brazil quickly became a viral video last week, but it’s really nothing new. “This is the reality since the late 90’s,” says Kepler Weber VP Olivier Colas adding that Brazil will see its worse storage deficit this year with no place to store some 70 million tons of production. Colas says the status quo had its roots in the record soybean harvest. “Soybean prices are not good, so producers decided to hold on to their production and wait for a better moment (to sell). And that only makes the situation worse, because this year’s second corn harvest (safrinha) could reach 64 million tons, a 57% increase over the 40.7 MT harvested last year. (InfoMoney

 

Chile Crop News

With global demand and salmon prices surging 40% since last year, Chilean aquaculture now faces the challenge of boosting production without committing the sanitary sins that tainted the waters of southern Chile in 2016 when a massive algae bloom decimated local salmon populations. According to AFP, Chilean producers are forecast to harvest 700,000 tons of salmon this year, but they face increasing pressure from environmental groups that want to see antibiotics curtailed and production slashed 50% from current levels. Chile currently exports 99% of its salmon with the US, Japan, Brazil and the EU among the most loyal consumers. (SwissInfo)

 

Mexico Crop News

US shipments of corn to Mexico are falling, and the neighboring country is no longer the main buyer of US corn, according to a USDA report on Thursday. Corn sales to Mexico through May were down 6.7% to US$1.4 billion which contrasts sharply with the 32% gain in the value of US corn exports over the same five-month period which saw US corn exports to Japan surge 53% to US$1.190 billion. Mexico, which imports 13.8 million tons of corn per year, is increasingly looking to South American suppliers for both corn and soybeans. “They are preparing a Plan B in case the US becomes a less reliable supplier. We would hope they don’t feel the need for a Plan B,” said Lesly McNitt, director of public policy for the National Corn Growers Association in Washington. (El Financiero)

The Elephant in the Room at the G-2o is the headline of a Reporte Indigo article this morning highlighting the flurry of free trade deals being made prior to and during the Hamburg summit. “Free trade represents the main point of tension between President Trump and the heads of state who defend the current trade situation,” writes Rodrigo Carbajal adding, “Mexico, which is probably the country that depends most heavily on its trade relationship with the US, has proposed a diversification strategy. Yesterday it was announced that the country would seek to finalize a free trade agreement with Brazil and Argentina, two of the world’s largest exporters of corn and soybeans.” (Reporte Indigo

 

Uruguay Crop News

Uruguay trade exports rose 18% in June compared to the same month in 2016 thanks to strong export sales of soybeans, meat and cellulose pulp, according to El País and trade promotion agency, Uruguay XXI. Uruguay export revenue in the first half of 2017 totaled US$4.48 billion, a 7.9% increase over the same period last year. “In the first six months of this year, Uruguay’s top three exports were beef (17% of the total), soybeans (17%) and cellulose pulp (13%) and together accounted for almost 50% of the country’s exports.” China was the #1 destination for Uruguay’s exports (45%) followed by Brazil (15%) and the United States (6%) where Uruguay exports rose almost 10% compared to one year ago. (El País

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