Strong contribution from the countryside to extend the “summer” of the dollar

The oil industry managed to reverse the unfavorable scenario in which it had fallen, as a result of the drought and other factors that led to exceeding 50% idle capacity in the plants that process grains. After an exceptional month of September, October could even be better and enter a path that would allow the sector to close by 2024 with more than 42 million tons processed, 37% more than in 2023. The data corresponds to the Rosario Stock Exchange (BCR), an entity that also confirms that idle capacity would pierce 40 points.

A few hours after knowing the data for the month of October, it is worth remembering that in the ninth month of the year the Chamber of the Oil Industry of the Argentine Republic and the Center of Cereal Exporters (CIARA-CEC) confirmed that Foreign currency settlement totaled US$2,480 million and the accumulated amount since the beginning of the year reached US$18,572 million.

Here he carves strong soy, whose year-on-year crushing would rise close to 44%, totaling 39 million tons. In contrast, sunflower milling would fall by 12%, closing the year with 3.4 million tons processed.”

Javier Preciado Patiño, analyst and former undersecretary of Agricultural Markets, assured Scope that “According to projections for this month, the processing of the oilseed could also be around 4 million tons.

The Information and Economic Studies area of ​​the BCR had warned of this last week, when it confirmed that Soybean crushing broke the historical record for the month in September and warned that October was going in the same direction.

The strong international demand for soy derivatives He promoted work in the oil factories in Argentina. If we add to this variable that weeks ago soybeans reached US$300 in the international market and that local producers accelerated marketing, the combo becomes the cocktail most desired by the Government, because this is where the profits are generated. dollars that largely allow the “financial summer” that the ruling party enjoys.

It is also true that – as the Rosario entity summarized it in one of its latest reports – there is a process of strong adjustment of relative prices, today the FOB quotes for any export item from the complex are below the average levels of the last four-year period, as a result of the high supply from the main exporting regions. However, attractive prices for demand, together with the need to cover the shortage of substitute products, have led to an interesting bid for Argentine soybean oil, flour and beans.”

External demand usually translates into greater interest in originating merchandise in the local market, which is why on several occasions soybean slate broke the ceiling of ARS 300,000/t and was traded above ARS 315,000/t. According to the Rosario entity, “beyond the still persistent inflation, taking into account the dynamics of financial dollars, today the soy slate is traded, at the CCL exchange rate, well above recent values ​​and has reached highest since January of this year”, meaning that it was advisable to sell and that is exactly what happened.

All of this significantly boosted soybean grinding in Argentine factories, which according to data from Oil World (a key international consultancy in global agriculture) would be around 10.25 million tons between October and December (vs. 5.7 mmt in 2023 and 8.9 in 2022) and at the same time foresees an export of soybean meal close to 28.4 mmt, which would constitute a record figure for the last 3 years. Something similar would happen with the export of soybean oil.

Preciado Patiño assured that “the oil industry has recorded 2.58 MMT of soybean meal with shipment beginning in October, an unusually high volume, since the average of the last 6 years is 1.86 MMT (+39%) . The current figure even exceeds by 7% what was registered for boarding in September, which, as we mentioned, had been a record.

In this sense, it is worth noting that “until now the oil industry has been completing scheduled shipments almost perfectly. Already in August and September the coincidence was complete and by October there were no major difficulties. According to Patiño, “based on the correspondence between shipments of soybean meal and grinding (the ratio is around 60%), it can be inferred that soybean crushing in October will be around 4 million tons, with high chances of set a record for the month.”

As if this were not enough, the field brings another good news to the financial panorama of the Government of Javier Milei. Thanks to this pace of dollar purchases, the BCRA operated with daily volumes more typical of the peak harvest in May than in the month of October.

It will be a very good second semester for exports and for the Government, because – according to Preciado Patiño – “we are going through a time of good prices for sunflower and soybean oil, active demand in Asia and that improves the equation for Argentina . The industry is operating well, which indicates that there is a positive margin and foreign currency is entering at a time when it usually does not arrive.

To take into account: so far this month the monetary authority, in charge of Santiago Bausilihas purchased more than US$1.5 billion, a figure that has not been observed since May. Strictly speaking, October would close as one of the best months since 2009.