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March 20, 2020

Argentine Mayor's Attempt to Close Ports Overruled for Now

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The mayor of the city of Timbues in the province of Santa Fe, Argentina on Thursday tried to close five grain terminals in the city and prohibit the entry of grain trucks due to the coronavirus crisis. He wanted the ports closed for two weeks until April 2, but crushers and port owners said he does not have the authority to take such an action.

The Governor of Santa Fe and the President of Argentina overruled his action, so as of this writing, crushing operations and port activity are continuing normally. Grain trucks have been prohibited from entering the city, so crushers and exporters are utilizing their stocks to continue operations.

The five grain terminals include AGD, Cofco, LDC, ACA, and Renovo (Glencore - Vicentin). The city of Timbues is located along the Parana River about 35 kilometers south of the city of Rosario. More than 80% of Argentina's grain is exported from more than a dozen grain terminals located on the Parana River near the city of Rosario.

Argentina is the world's largest exporter of soybean meal and soybean oil and prices at the Chicago Board of Trade moved higher on Thursday in anticipation of increased export business moving to the U.S. not only due to potential problems in South America, but also due to very low prices.

There have also been worries about port activities in neighboring Brazil. Brazil is the world's largest exporter of soybeans and as of this writing, the two biggest grain ports in Brazil, the Port of Santos and the Port of Paranagua, are still operating normally, at least for the time being. On Wednesday of this week, union leaders at the Port of Santos requested a suspension of operations due to the coronavirus crisis, but Brazilian authorities instead instituted a series of measures to insure the safety of port workers.

Brazil is in the midst of harvesting their 2019/20 soybeans and they are expected to export 8.5 to 9.0 million tons of soybeans during the month of March. The director of the Brazilian National Association of Cereal Exporters (Anec) indicated earlier this week that they continue to feel that Brazil will export 73 to 74 million tons of soybeans in 2020. Additionally, Anec feels that Brazil will export 34 to 35 million tons of corn in 2020.

For the time being, beef, poultry, and pork processors in Brazil are operating normally.