Of course, it still remains for the speculative funds to go out and take profits, as happens after such drastic increases. For now, soybeans accumulate their fourth rise in a row this week and this Thursday they earned more than US$10 per ton in their final price, but during the round they far exceeded US$650 to revolutionize markets for yes altered.
Another key fact is that This rise in soybeans occurs at a pivotal moment for the Government and especially for the Central Bank. The monetary authority needs to add reserves to meet the IMF’s goals but also meet the continuous demand of the importing sectors so as not to slow down activity. The balance is complicated and here the dollars that the field can contribute come into play. According to the projections of the Rosario Stock Exchange, the soybean chain could inject this year, from the average FOB prices of May, more than US$23,000 million. If the current values are consolidated and if the sale of producers accelerates in the coming weeks, the economy would add an additional US$8,000 to the initial accounts in a conservative scenario..
From here on, there is another key issue to take into account and it is not minor for Argentina at all. China strongly accelerated its purchases of soybeans in a context in which the United States has its stocks in the red and there are still months to go before the new harvest enters. The question that arises is why China goes out to buy so much grain. Something may have to do with the prolongation of the war between Russia and Ukraine and in a context in which Argentina is exporting less soybean meal due to the drop in the competitiveness of the industry.
The market then wonders if China is preparing for a global escalation of the war in the Black Sea or if it is also considering a possible invasion of Taiwan. Neither of the two variables is positive for the world economy, much less for the price of food, which is at record highs.
Thus, the crux of the matter will be to closely monitor not only the Chicago market over the coming weeks, but also China’s movements in terms of grain purchases. Because it is already proven from the coronavirus, that if China sneezes, the world catches a cold.
Source: Ambito
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