U.S. maize sowing has been delayed, as revealed by the United States Department of Agriculture (USDA, abbreviated in English) last Monday, when in its weekly report Sowing progress is reported at 14% of the estimated area, up from 42% on the same date in 2021 and an average of 33% over the last 5 years. This is the biggest delay in planting in the last 15 years And that may be one of the reasons for the steady trend in corn prices in the Chicago market.

The USDA has already estimated a reduction of 1.540 million hectares for maize in a report dated March 31 last year. If the weather complicates the evolution of the plants and if there is an additional decline in the area under cultivation, the Chicago market may enter a new rise in grain prices.

Corn planting works continue until the first week of June and by this date should reach 97% of the total planted area. Climate and its impact on crop evolution are key factors that need to be monitored.

Meanwhile, good weather in moist pampas continues to advance the crop. According to a report by the Buenos Aires Grain Exchange, corn yields have reached 25% of the suitable area. The same report indicates that the producer prioritizes the soybean crop, which has already been promoted to more than 54.7 per cent of the suitable area.

In recent days there has been a strong influx of trucks into ports with both soybeans and corn. In the first days of May, a total of 20,657 trucks with soybeans, equivalent to 661,000 tonnes, and 13,903 trucks with corn, equivalent to 445,000 tonnes, entered the ports in the first days of May, according to the firm Agroentregas. This is also an indication of what the producer’s priority is for the soybean crop. From 2 to 5 May – just 4 working days – 1,106,000 million tonnes of soybeans and maize entered the ports.

If we analyze the evolution of soybean planting in the United States, it also shows a significant delay: 8% of the planned area has already been planted, 22% compared to the same date in 2021. In the case of soybeans, its sowing window lasts until June 20th.

The delay in planting both corn and soybeans is a major market factor today, which could force the currency to fall to one side or the other. A further decline in corn area in the US implies a further increase in soybean area. In this scenario, we will be facing a corn growth market and a falling soybean grain market.

In terms of demand for soybeans in Argentina, the oil industry needs to purchase grain in order to have sufficient physical strength and be able to carry out its grinding plans. Today, oil companies announced the purchase of soybeans for a total of 12.565 million tons, of which 8,142 million are expected to be priced. The real position of the oil industry then is 4.423 million tonnes already purchased at a fixed price, a volume barely enough to cover a month of campaign processing peak. This is why we are considering a soybean growth scenario in the short and medium term.

The author is the President of Pablo Adreani & Asociados