Soybean dollar hot sale: What does it mean for the field?

. – First we will make some clarifications. The country man, when he sells soy, he does so with a retention of 33% and settles at a soybean value of $140. In this opportunity, the country man will be able to sell with a retention of 33%, but they will liquidate the merchandise with a dollar price of $200 .

How are the numbers?

. – The slate price on Thursday was US$375, which, if you multiply it by a dollar of $139, gives you a value of $52,127 per ton. As of Monday, if soybeans were at US$375, for a dollar of $200, it gives you a value of $75,000 per ton. That implies an improvement of 44%.

Why do you say “if soybeans were at US$375”?

. – With a rise in the dollar to $200 there will be a 12th gate (tragedy that occurred in Argentine soccer when all the supporters wanted to leave at the same time through a gate that was 12th), everyone will want to sell and leave for a single place , with which the price could drop, we leave this issue open, but do not say that we did not warn. The world soybean stock is around 90 million tons, if in one hand we are going to sell close to 3 million tons this could affect the global price.

Recommendation

. – Sell today what you have to sell. On Tuesday, with Chicago in full swing (Monday is a Chicago holiday), the price could drop.

The country man, if he sells, where does he put the money?

. – You will have to open a special account in the bank, chacarera account they call him popularly. That money that you place in pesos, would be updated by the value of the linked dollar (official dollar)

Can you buy alternative dollars with the soybean dollar sale?

. – We understand that you won’t be able to buy alternate dollars for a while, we haven’t seen that so far, but we think it will.

What consequences does this measure have on the market?

. -The country man has the opportunity to sell at a price that is 44% higher than the current one, if this difference is reduced to levels of 20% he will not use this resource.

What would you recommend to the producer?

. – With this difference, to sell this Monday, with the proceeds I would buy the greatest amount of supplies possible, I would be selling with a dollar of $200 and buying supplies at a price of $140. On the other hand, I would diversify the pesos received and place myself in a fixed term adjusted for inflation, which increases at a higher rate than the increase in the official dollar (linked dollar update)

What do you think the producer will do?

. -The producer sells if they let him buy dollars, if they don’t let him buy dollars he won’t sell what the government expects. The producer today, if he sells, does not have machinery to buy, there is a lack of supplies that are essential for the chain, so I do not think there will be many sales.

What will the owners who give their field for rent do?

. – They will ask you to pay your rent, but beware, they will be able to receive this higher value, but they will not be able to buy alternative dollars. You have to see how they have made the contracts. We don’t have as many specs, but here’s a window to buy dollars if the wording on the measure is confusing.

Does this complicate the one who rents the field?

. – Of course you will, you will pay an expensive rent and, when you have to sell the product of the campaign, your income will be with a lower dollar. A typical case of Robin Hood, they take the one who has the least, the measures are awful.

The one who sells, what will he do?

. -Whoever sells will cover the expenses in pesos for the coming months, as he will also buy the necessary supplies for the coming campaigns, this will cause him to start retaining wheat and corn.

Then?

. – The prices of products derived from wheat and corn will rise, this implies milk and livestock in the case of corn, and products linked to wheat such as bread, fresh pasta, among others. This measure complicates dairy farms and feedlots, as well as the pig and poultry sector.

This is a disaster?

. – You said it my friend, the Minister of the Economy ignores the fact that there are communicating vessels in the economy, a producer not only has soybeans, he produces other crops, and if he makes a profit for one, he will try to save others, which would generate less supply and we estimate that , if demand is constant, prices will rise.

Does the soybean dollar not look very attractive?

. – Not at all, the country man is going to measure how prices evolve, today with a value of $52,127 per ton he delays the sale, if he is going to receive $75,000 per ton he will sell, but if the offer is abundant and that value drops to levels of $65,000 per ton, it is not going to sell and will wait in the future to see what happens.

What will happen financially?

. – There will be a greater emission to buy soybeans at a dollar price of $200, and the Central Bank will have a great loss since it will then sell the imported dollars at $139.

doWhat about the largest issue?

. – It will have to be removed from the market via the placement of leliq at a rate of 69.5% per year, that is very onerous.

Is there a meeting of the Central Bank next Thursday?

. – There the interest rate will be raised again, if in August inflation is 7%, this would imply that the inflation of the last 12 months reaches 78.6% per year. If inflation were 6.0%, it implies that inflation in the last 12 months reaches 76.9% per year. This means that the Central Bank is going to raise the rate to a minimum of 76.0% per year, which impacts an increase in the Central Bank’s monetary liabilities, which would boost the value of alternative dollars in the future.

Do you think that with an annual rate of 76% the dollar falls?

. – Not at all, inflation as of December is projected at 100%, so that the rate mitigates the rise in alternative dollars, the rate should be at 90% per year today, in this way inflation would go down.

It would also be the peace of the cemeteries

. – Well, if you want to solve the problem you have to put a high rate, if you don’t want to solve it, keep running to the inflation behind. You would also have to cut spending and achieve a fiscal surplus, but for this you have political restrictions. What needs to be done cannot be done. I don’t know if I explain myself.

Conclusions

. – The soybean dollar at $200 is a total inconsistency, a mess, which will result in more inflation due to the rise in wheat and corn, as well as a considerable increase in the monetary liabilities of the Central Bank due to a greater issuance of bills. The latter will result in a rise in alternative dollars. Dollar heading to $400 by the end of the year.

. – Another madness is capturing dollars from soybean exports at $200 and then selling them to importers at $139. Perhaps we are missing something, and after September they devalue to a value greater than $200, but I’ll leave that to you. the Private Report.

. – The producer is going to sell if the price stays above $65,000 a ton, if it goes down nobody is going to sell. The biggest problem with this measure is that whoever uses this benefit cannot access the dollar bill. Since the peso is not savings, and the official dollar increases less than inflation, the producer does not feel safe selling and staying in pesos. On the other hand, there is not much merchandise to buy, in the market there is a lack of trucks, vans, harvesters, planters, and many vital inputs for production.

. – The measure is a monetary and exchange monstrosity, the rural sectors had not agreed on this measure, but it was presented as agreed upon. The problem with the liaison table is that it doesn’t know how to communicate, and it gets tangled up in the official discourse.

The Save recommendation

. – If you can sell above $65,000, sell what you can wear, immediately or in 90 days. For example, I need to buy supplies for $2,000,000, and I need a working capital of $2,000,000 for 90 days for the company. What I would do is sell for the equivalent of $4,000,000, I pay for the supplies and the rest I pay for a fixed term of 30 days and I use it to the extent that I need it. If you want to cover yourself for longer, sell and make sure the bank makes you a fixed term adjusted for inflation to 90 days. Not all banks are accepting to make the fixed term, you have to do it in the head of a human person, if you do it in the company you pay 30% of profits for the interest generated. To get the money out of the company you have to pay 7% in profits for withdrawal of profits. As you can see, it is very complicated.

. – If I have soy worth more than $4,000,000, I don’t sell it, I hope because in the future we will see it much more expensive.

. – Since I sold the soybeans, I don’t sell the wheat and corn, nor do I sell the farm, I hope in all cases.

. – Remember that in Argentina pesos are like an ice cream that they give you at 2:00 p.m. in the sun, with a temperature of 42 degrees, and you have to drink it at 8:00 p.m. You have nothing left.

. – Save on merchandise, sell soybeans at the hot sale as long as you like the number, and stock up on other products. With the dry weather ahead of us, corn and wheat will be through the roof. The sunflower has bad weather ahead, and there are not many seeds to sow, therefore, whoever has a sunflower should save it. With the price of meat, it is better to wait to sell more expensively in the future.

. – Remember, sell soybeans to cover the working capital of the company and not badly sell other products today. The economy has communicating vessels, whoever does not know will end up in trouble.

. – This economy is a short blanket, if you cover your chest you will uncover your feet, and that is what the minister is doing, but nobody tells him.

financial analyst

Source: Ambito