Buenos Aires, May 11th. Representative Elisa Carrio (photo), a member of the coalition in charge of Argentinean Government and usual spokeperson, told farmers: “Be patriotic, sell your soybean”, while in the financial market the dollar continued climbing up to a new record.
At the beginning of the year, the dollar was traded below AR$18. At May 11th US currency had raise above AR$23, i.e. a depreciation of 30% of the “peso”. The Government is trying to stop the dollar concerned by its effect on the inflation rate, selling Treasury reserves and increasing the interest rate. But those measures resulted in insufficient and Government decided to apply IMF for a standby credit.
Agribusiness is responsible for 2/3 of the national exports, and soybean complex represents one of each three dollars brought to the country. But soybean harvest was cut 20 million metric tons from 2016/17 season due to the severe drought that affected the country. Moreover, while 5,7 million hectares (around one-third of the total area) is still waiting for harvest, the wet weather during May is affecting the quality of the grain. The Rosario Grain Exchange (BCR) estimated that another half million tons could be lost, for this reason, reducing the soybean output near 37 MMT.
The answer of farmers and consultants was immediate. “Sells of soybean at May 2nd was 17 MMT versus 18 MMT in 2017. There is not a speculative retention of the grain”, says Paulina Lescano, independent grain market analyst. “Soybean output drops 30% from original estimations and large farmers already had sold much of his grain”, added in dialogue with www.eFarmNewsAr.com. “Now, farmers are dealing with collect the remainder of the crop and have the right to sell the grain in a favorable context”, added.
On the other hand, Andrés Alcaraz, spokesperson of the Oilseed Industry Chamber, estimates that farmers are retaining the grain waiting for a more stabilized scenario. “Why would they sell the soybean if they don’t know how much the dollar will worth next week?” he ask himself talking with www.eFarmNewsAr.com.
Last but not least, it estimates that 7 million tons of soybean or more are still holding in silobags from 2016/17 harvest. Ministry of AgIndustry estimates the carryover at 12,8 MMT. Other market analyst like Javier Buján reduce this volume to 11 MMT. For Mr. Alcaraz the carriyover not surpass 7 MMT. Anyway, if this soybean were sold, between 3,000 or 5,000 million dollars would be brought to Argentina as exports.