Low River Levels Affect Argentine Exports
The Parana River takes soy and corn from Argentina's farm belt to the port of Rosario, much like the Mississippi River to the Gulf in the US.
Recent dry weather in southern Brazil has left the Parana shallower than normal, and the forecast is for the river to get even lower in the near term.
The level of the Parana at Rosario is at 0.90 meters compared to the average of 3.58 meters.
Argentina has relied on dredging operations to ensure the river remains navigable, and currently dredges the port to about 10 meters.
Every additional foot of depth allows ships to carry 1,800 to 2,200 tonnes of additional cargo.
Exporters are loading between 5,500 and 7,000 tonnes less cargo per ship due to low water levels.
There have been reports of ships stopping in Brazil to add to light cargos before proceeding to their destinations.
FBN’s Take On What It Means: The Parana's level is coming down again, but not as much as last year yet. If the situation continues to worsen, crush rates could be impacted, and concerns arise that soy product markets eventually tighten during the latter part of this summer. It is too early to tell whether loading light cargos, topping off in Brazil, or further dredging will be the solution. The situation does put more pressure on the US to produce as expected this season.
US Weekly Export Sales as of April 29
Corn export sales of 5.4 million bushels for old crop and 4.2 million for new crop were lower than expected.
Corn sales were down 74% from the previous week and 72% from the prior 4-week average.
Soybean sales of 6.1 million bushels for old crop were down from last week, but still remain positive.
New crop bean sales of 7.1 million bushels were near the low end of the expected range.
Wheat saw net sales reductions of 3.5 million bushels due to cancellations from unknown destinations, a marketing year low.
Upland cotton sales of 63,700 running bales were down 17% from the previous week and 56% from the prior 4-week average.
FBN’s Take On What It Means: Soybean sales have slowed recently, but any positive sales are likely to see the USDA increase its total export forecast. Corn sales were not surprising as Argentina remains the cheapest export origin, and US sales are mostly to regular customers.
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