Field Liquidations: Soybean Dollar Boosted Revenue in May, but Plunged 38% for the Year

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During the month of May and after the end of the export increase program (PIE) known as soybean dollar 3, the foreign exchange settlement of agribusiness exports increased $4212.73 million, up 78% from Aprilthus bringing the total revenue from overseas sales of grains and by-products to $9449.97 million in all of 2023.

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The sum is 38% lower than that obtained in the same period of the previous year, at which time it surpassed $15.329 million. This is due to the meager harvests of the last campaign, the worst for several decades, due to the extreme drought that affected much of Argentina’s agricultural area, which would result in a loss of about 20,000 million dollars of net income from the field according to the Rosario Stock Exchange (BCR) calculations.

According to the Chamber of the Petroleum Industry of the Argentine Republic (CIARA) and the Cereal Exporters Center (CEC), subjects that represent 48% of national exports, in May the companies in the sector liquidated 45% less than the same month of 2022.

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“The foreign currency income for the month of May is a reflection of a market heavily impacted by the extreme drought which has drastically reduced production of the rough crop, corn and soybeans,” they explained on camera. But it should also be taken into account that PIE III expired on May 31 and caused significantly higher supplies of soybeans, sunflower, sorghum and barley than in previous months. According to official data, at the end, soybean 3 dollar contributed $5086 million.

On the other hand, for a week, the closest future on soy has plunged below 500 dollars and the fall does not stop. “The context which cannot be worse for the country, as it is having the worst soybean campaign since 1996, considering its productivity,” the BCR said.

Soybean Complex Export Valuation Lost $1.3 Billion In Just Two Months Due To Falling Prices. And, according to the body, “there are few factors that have the potential to reverse the downward trend in prices in the short term.”

Thus, warns the BCR, “the collapse in prices becomes a serious blow for a country like ours, heavily dependent on agricultural exports in general and on the soybean complex in particular”.

From March to date, the valuation of the projected volume of exports from the soybean complex has lost an additional $1.3 billion. Consequently, at current values, FX settlement of Argentina’s main export complex would post $8 trillion interim loss in 2022-23 cyclecompared to the previous 2021/2022 campaign, according to BCR estimates.

Other reasons for this price decline include a rebuilding of US inventory levels to their highest level in four years and the massive exit of soybean-positioned investment funds in the Chicago market.

Source: Clarin

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