Next for the dollar and the dilemma of mash cows

-I don’t think it will devalue, confiscate deposits or restructure the public debt in pesos. It seems to me that the government will continue to anchor the official dollar, at most it would accelerate the devaluation rate to the rhythm of inflation. I don’t think it will default on the debt in pesos, it will prefer to issue debt rather than reshape it. Regarding deposits, I don’t think they run any risk, but with an annual rate of 6.75% for fixed terms, they are not attractive.

Q.: What measures can you announce?

-Reserves are scarce, therefore, a new return to the stocks is coming, we are going to a scenario of more stocks, therefore, a higher blue dollar.

Q.: Did the dollar rise too much?

-Do not believe, the MEP dollar ended at $430 and the Qatar dollar is at $450, the dollar that we measure by taking the total monetary liabilities and the reserves gives us a value of $487. I think there is some room for the MEP to rise. For those who missed the rise in the dollar, perhaps the revenge will happen by placing inflation-adjusted pesos.

Q.: And the blue dollar?

-It is a market with little movement, the caves have a stock of dollars, and the business is to trade that stock. When the market goes down, all buyers finish their operations, because the cave is not going to lose all its stock. This generates a price for the blue dollar that is not transparent, which is why the price of the blue is much higher than that of the MEP dollar.

Q.: Can the blue dollar go higher?

-If more restrictions are placed, it will act as an escape valve. The best thing would be for the government to have a financial dollar and a commercial dollar, but I don’t think that will happen with the current economic management.

Q.: Will the farm sell soybeans?

-A field of 1,000 hectares this year could bill $120 million, that is, $10 million per month, and lose $200 million a year, that is, $16.7 million per month. What the field man is looking for is to lose less.

Q.: The turnover of a field of 1,000 hectares is very low…

-This year it would bill $120 million a year, estimating a soybean price of $100,000 a ton. The field man does not sell because he expects a higher price to reduce losses, and see if he has revenge in the next season.

Q.: Does the government believe that it is not selling because it is conspiring?

-The country man is melting, he does not have time to conspire. He is heavily in debt, bounced checks, and he is looking to reconfigure the business to see if they will rent the field back to him. 70% of the Argentine field is leased to producers.

Q.: There is a different vision in CABA…

-We are in a unitary country, and nobody in CABA imagines what is happening inside.

Q.: In livestock too?

-The dry climate forces the farmer to get rid of his cows, we are making cow puree. The liquidation of animals is very large, and this will make the price of meat more expensive in the future. In the meantime, the farmers are melting down because they don’t have enough to feed the animals and they go out to sell the cows at any price.

Q.: How much is a cow worth in the United States versus Argentina?

-In Oklahoma, $1,330 in Argentina does not reach $350. Animal liquidation is an incalculable capital loss for the rancher.

Q.: How were the trade balance numbers?

-In the first quarter of the year, the red is US$1,290 million, exports fell 17.9% and imports 4.4%, we are complicated with reserves.

Q.: Is an agreement with the IMF coming up?

-The agreement is vital, we cannot meet the fiscal goal, this year we expected a primary fiscal deficit of 1.9% of GDP, and the idea is to renegotiate it to close a fiscal deficit of 3.0% of GDP for the whole year.

Q.: How are the numbers for Argentina?

-Very simply, Argentina has a fiscal deficit of $4.1 trillion and a public debt of $82.7 trillion. So no one will lend a peso to Argentina.

Q.: What do the markets expect?

-That the next government achieves a fiscal surplus of $4.0 trillion, in this way Argentina would repay its debt in 20 years.

Q.: Is it a lot of sacrifice?

-The one that was made in the last decades is a great waste, the bad administrations are paid in the short or in the long run.

Conclusions:

• If there is an agreement with the IMF, the dollar has a decent price. If there is no agreement with the IMF, the dollar is very cheap.

• The dollar still has room to rise to the zone of $470/$490.

• If there is an agreement with the IMF, Argentine bonds such as the AL30, which is worth US$ 21.80, could have a very bullish path.

• Argentine shares rose due to the rise in the dollar, not because of higher profits, a drop in the dollar could invite profit taking.

• If there are more restrictions on the purchase of dollars in the official market, we could see further rises in the dollar in the informal market.

• The field will continue without liquidating soybeans, since it has a very large loss ahead of it and will seek to reduce it while waiting for a higher price. On the other hand, in many places in Argentina soybeans have not yet begun to be harvested, something that is not mentioned in the media either. The producer cannot sell what he does not have.

• The prices of soybeans, corn and wheat are falling in world markets, something that the government should also say, but it omits it, seeking to demonize the countryside.

• The price of chicken is plummeting, due to the increased supply due to the closure of exports. In Cañuelas meat prices are very low, consumption has fallen and the counter is complicated.

• Consumption is very low, and this complicates the tax collection for the month of April, be careful that we are going to a scenario of growing fiscal deficit, and we do not see genuine sources of financing, therefore, inflation, far from subsiding, could continue to rise . Now yes, the UVA fixed term is better than the traditional one.