September 20, 2016
2016/17 Corn Acreage in Argentina Remains in Doubt
There was talk in the market last week concerning the 2016/17 corn acreage in Argentina after the Rosario Grain Exchange estimated that the corn acreage will increase only 18% in 2016/17. Most of the estimates (including mine) are indicating a greater increase in corn acreage. I am estimating that the corn acreage in Argentina will increase 25% in 2016/17.
The difference in percentages seems very large (18% vs. 25%) but the actual difference in acreage is not that large at all. If you just consider corn produced for commercial sale, I am estimating that the corn acreage will increase 800,000 hectares while the Rosario Exchange is estimating it will increase 650,000 hectares, so that 7% difference only equates to approximately 150,000 hectares.
The eventual corn acreage in Argentina may still be influenced by the Argentine's government decision concerning the soybean export tax. The Argentine government seems to be backtracking on their promise to reduce the soybean export tax another 5% from 30% down to 25%. President Macri promised to reduce the tax by 5% annually until it was eliminated. With the Argentine economy not preforming as well as he had hoped by this date, it now appears that President Macri is not convinced that the government can forgo the revenue from the soybean export tax.
If the soybean export tax is not lowered, the thought is that it might encourage some more corn acres at the expense of soybeans.