Argentina's highly-contested soybean stocks figure may not
be as high as the US Department of Agriculture believes, but is still high –
equivalent to twice America's own – and set to rise further next season.
USDA staff in Buenos Aires questioned the department's
official estimate that Argentina will be left with 9.37m tonnes of soybeans at
the end of the 2012-13 season – which has actually only just finished for the
country – seeing it at 8.64m tonnes.
However, even that estimate is viewed in Argentina itself as
elevated, the bureau said.
"Most contacts do not
agree with this number, indicating it is too high," with the consensus at 5m-6m
tonnes, equivalent to 2m-3m tonnes "above an average year".
However, while this consensus figure "sounds reasonable, the
numbers do not add up", the bureau said.
'More and more
Argentina's farmers are widely seen as hoarding their harvests
as a hedge against inflation, with crops offering dollar-denominated security
against peso depreciation.
"Over the last few years, producers have had more and more
incentive to hold on farm stocks year after year as physical assets, instead of
selling the commodity and depositing the money in a bank," the bureau said.
"After the financial crisis in 2001, when there was a freeze
on bank accounts and people were not allowed to withdraw from their own
accounts, producers began investing their money in anything but untrustworthy
"It does not make sense to sell a large quantity when
inflation is estimated over 30% and the peso is unstable."
And soybeans are particularly favoured for hoarding, given
their ready market, with Argentina the top exporter of soyoil and soybeans, while
the country operates export controls over wheat, a factor viewed as limiting
'No limit to storage
However, getting a handle on the size of the stocks has
"Some producers will say there is nothing, and when driving
through the heart of soybean country, there are very few silo bags therefore
validating this theory," the bureau said.
But working on data from last year's harvest, broadly seen
as exceeding 49m tonnes, exports of 7.9m tonnes and a crush of 35.5m tonnes
imply significant supplies left unaccounted for.
And the number looks set to keep on increasing.
The bureau said it "anticipates that more stocks to be held
each year", highlighting the widespread use of silo bags, which can store up to
250 tonnes of grain.
"Essentially, there is no limit to storage capacity when including
Stocks will end the newly-started 2013-14 season at 11.6m
tonnes, and hit 14.1m tonnes by the end of 2014-15, equivalent to one-quarter of
The bureau's comments follow an estimate from Michael
Cordonnier, the respected crop scout, that as of March Argentine farmers were
still holding onto 5m tonnes of last year's soybean crop.
In December, Argentine newspaper Cronista Commercial
estimated that Argentine soybean farmers were holding 11.5m tonnes of soybeans.
The bureau's estimates for 2013-14 are based on a forecast
for production of 54.0m tonnes, in line with the USDA's official forecast, and
for next year of a 57.5m-tonne crop.
"Soybeans continue to be the 'safe' and 'easy' crop," it
"Input costs for soybeans are lower than for other
commodities - it costs more than twice as much to produce corn that it does to
"Furthermore, the margins for first crop soybeans are higher
than any other crop grown in Argentina."