Producers are looking at the situation with caution and are only selling off the necessary goods. This complicates the exit from the exchange rate restrictions, which investors have been waiting for so long.
The price of the soy fell again in the Chicago market and was located at US$348 the ton, the lowest nominal value in four years. This is the sixth consecutive day of losses in the main reference market worldwide, according to the consultancy Granar.
The collapse of soybean prices implies a forward impact on foreign exchange earnings that the Government -the country- needs to shore up reserves, which are falling due to the interventionist policy that the national Executive has undertaken to avoid the soaring financial dollars.
According to Granar, the drop in soybean prices is due to the projection made by the US Department of Agriculture (USDA) of a record harvest in the United States, after raising its volume from 120.70 to 124.90 million tons, and the increase in final stocks, from 11.85 to 15.25 million tons. These values were above those expected by the market, which were 121.63 and 12.66 million tons, respectively.
Why soybeans are falling
The soybean collapse was due to favorable weather and good crop development in the United States, high current world stocks and large anticipated production for the next campaign. The World Agricultural Supply and Demand Estimates (WASDE) report added 6.9 million tons of the oilseed to its global harvest estimates, thus totaling the 428.7 million tons. Now, with an expansion of the projected planted area and a forecast of better yields, production for the 2024/25 campaign in the United States it climbed to 124.9 million tons4 million tonnes more than estimated in July. In this way, the new cycle would present an offer 11% higher than 2023/24.
According to the USDA, in the 2024/25 cycle there will be a Record production of 345 million tons of soybeans between Argentina, Brazil and the United Statesthis represents a increase of 30 million tonnes compared to the 2023/24 cycle. In addition, world stocks are expected to reach 134.3 million tonnes, an increase of 22 million compared to the previous cycle.
How much is not collected?
Romano Group’s Head of Research, Salvador Vitelli, He pointed out that the price drop means about US$7.7 billion less than if the price had been maintained since Javier Milei’s administration began.
On the other hand, PPI added that thinking about next year’s thick harvest, and the inflow of foreign currency that will occur, it was estimated that it could “we will have US$5 billion less inflow of foreign currency from agriculture.”
The situation of producers
In this scenario of sustained price declines for months, although the sale of grains by Argentine farmers does not show a significant delay compared to previous years, caution and a slowdown in operations are observed while awaiting an improvement in marketing conditions.
Meanwhile, producers They only sell the merchandise necessary to pay off debts and face the expenses of the next coarse sowing (summer crops) that is about to give the starting signal. To date, they have already marketed almost 50% of the 50.5 million tonnes harvested in 2023/24.
According to data from the Chamber of the Oil Industry and the Center of Cereal Exporters (Ciara-CEC), The sector’s foreign exchange settlement for the period January-July 2024 was US$ 13.64 billion. “This figure is slightly below the average of the last 10 years (US$ 14.975 million) and more far from the average of the last 5 years (US$ 16.137 million)”, explained the president of the Cereal Stock Brokers Center, Marcos Hermansson.
Source: Ambito
