While the government ruled out a new soybean dollar, settlement of field-sourced dollars declined sharply in February due to weather factors (drought) and negotiated soybean advances in 2022.
According to official data from the Ministry of Agriculture, 310,000 tons of soybeans were marketed in the first week of February (95,300 from the old campaign and 214,900 from the new campaign).
This is, as explained Juan Manuel Ubertianalyst at the Grassi brokerage, 75% less than in the same period of 2022 and almost the same figure compared to the average of the last 3 years.
“This is in a context of great uncertainty about the possibility of the arrival of a new soybean dollar, which leads to withholding the goods pending the benefit. Furthermore, the drought affecting the new campaign development suggests a lower harvest scenario and it is logical that commercialization will be halted until the prospects for yields and final production are better clarified,” explained the analyst.
Of the 42 million tons of soybeans produced in the 2021-22 cycle, there are 5.2 million tons in the hands of producers. And there is still a price to be set for 3 million tons. Thus, at a domestic market price that has fluctuated around USD 430 tonnes over the past week, the value of this remaining soybean is approximately $3.5 billionaccording to a report from the Rosario Stock Exchange.
Given this lower sales rate, the February sale will continue the same trend as in Januarywhen it barely touched 928 million dollars, which means a figure 61% lower than in the same month of 2022 and 75% lower than last December, according to data from the Chamber of the Petroleum Industry of the Argentine Republic (CIARA). and the Cereal Exporters Center (CEC).
So far, in February iOnly $400 million came in. And there are 6 business days left until the end of the month, so it is assumed that it will close with lower than average liquidations, taking into account that in 2022, for the same month, 2,500 million dollars were settled.
“March and April will also be very lean. Lack of wheat and low prime soybeans and early corn due to drought mean this there is very little supply“, She said David Miazzo, economist at the Agricultural Development Foundation of Argentina. “Added to that the soy dollar rumors. Who can wait, wait,” she said.
In this sense, the cuts in soybean crops continue for this 2023 due to the climate. According to private screenings, the soybean crop would drop dramatically. The Buenos Aires Grain Exchange estimated 38 million tons, while the Rosario Exchange was more drastic: 34.5 million tons, sbeing the lowest volume in the last 15 years.
And these crop numbers could continue to decline after climate fluctuations. Era high temperature that “burned” the crops and then, a unprecedented frozen in the middle of summer it was even more striking.
Given the importance of the soy chainthe impacts on it are those that have the greatest weight. Lower production reduces gross soybean product by $5.8 billion from last season (26%), a decline in exports of $4.5 billion, and revenue would suffer, according to Buenos Aires Grain Exchange estimates of 2.3 billion.
Given this negative scenario and the decline in central bank reserves, there are rumors in the market that the third dollar of soybeans could be given (differential variation for producers). $13.4 million went into the first version of this program and $3.4 billion into the second edition.
In any case, the government itself has ruled out the possibility of a new soybean dollar. It was the same Minister of Agriculture, Juan José Bahillowhich he declared on Saturday that it was “not on the agenda”.
Source: Clarin
