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Production
Estimates and Crop Assessment Division |
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Production
Estimates and Crop Assessment Division |
October 31, 2003
In July, as Argentine producers were preparing for the upcoming planting season, relative prices favored soybeans over corn, and soybean expansion is expected to remain strong. As of October 10 when USDA last released its official estimates, soybean harvested area (see table of harvested area) is forecast at a record 13.2 million hectares, up 5 percent from last year’s record level. Additionally, sunflower prices also appear to be favorable; however, less than favorable planting conditions in Argentina have resulted in area being similar to last year. Sunflower harvested area is forecast at 2.3 million hectares, down 2 percent from last year’s 2.4 million and up modestly from a relatively low 1.9 million hectares 3 years ago. (USDA will next release its official estimates of Argentine oilseed production on November 12.)
Using FOB Argentina prices, the soybean/corn price ratio in
July was
higher this year at 2.26, above the 2.10 of last year. The 2.10 ratio of la
st
year is fairly neutral, but because of excessive rainfall at corn planting, and
because of the financial crisis soybean harvested area expanded by 11 percent
while corn area remained level at 2.45 million hectares.
This year, soybean area is forecast to expand by 5 percent to 13.2
million hectares, its eleventh consecutive record.
In absolute terms, the FOB Argentina soybean price
in July was US$217 per ton, up
from US$204 one year earlier. Meanwhile,
corn was US$96, nearly the same as in 2002 when it was US$97.
Sunflower prices as of July were relatively favorable in
2003 as they were in 2002. The
sunflower/corn
price ratio in July was at 2.66, above 2.40 where it was last year.
Despite the increase in price ratio, early forecasts are for sunflower
harvested area to be similar to last year.
Argentina sunflower 2003/04 harvested area is estimated at 2.30 million
hectares, down from 2.35 million in 2002/03. Harvested
area fell precipitously in 2000/01 when July export prices fell well below
US$200 per ton. This year the July
FOB export price was a much more favorable US$255 per ton.
Sunflowers were also favorably priced relative to soybeans
in July. The sunflowerseed/soybean
price ratio was 1.18, up slightly from 1.14 seen in 20
02, and much above 0.86
where it was in 2000 when sunflower area declined so drastically.
The favorable prices are attributed to growing world demand for vegetable
oil and disappointing oilseed crops in 2002/03 in the United States, Canada,
India, and Australia. A recovery in
oilseed production is expected in many of these countries with the exception of
the United States. The Black Sea
Region sunflower crop is expected to be exceptionally good in 2003/04 with output
levels in Russia and the Ukraine expected to be the highest since the break-up
of the Soviet Union. Despite this,
sunflower oil prices have remained at relatively high levels on world markets,
due to strong world demand for vegetable oil in general.
