Due to Argentina’s peso devaluation and strong local demand, soybean price was firmed despite the great losses in the international market. Soybean prices reached up to $ 3,900 /ton, which raised the weighted average price of the Arbitration Board to $ 3.880 / ton, marking the maximum value since mid-March.
Despite that, it has been observed that the volume traded is well below expectations. Although the local price rises have given dynamism to the market, many producers are more interested in financial tools than in selling soybean. On the other hand, credits to finance costs production allow flexibility in sales over time.
However, the local exchange rate on Thursday 19 marked a weekly rise of 8%, from $ 15,335 to 15,900/USD. With this dollar strengthening added to domestic demand, producers could speculate to reach the psychological value of $ 4,000 / ton. Nevertheless, as it is shown in the chart, the buyers’ margins are in negative area. The industry´s payment ability is next to u$s 235 / t, which somehow it limits the potential increase of the soybean in the local market.
Export activity supports corn prices
Bid offers were at $ 2,400 / t on BCR's trading floor, although it could have improved by $ 50 for greater volume. Within the wide range of forwards, sales were triggered at US$ 150/ton in June and US$ 140 /ton in July. Those sustained values are explained by the export activity, trades next to 410.000 tons this week, more than previous week and farmer selling reaching to 12.4 Mt.
Meanwhile, cereal's harvest progressed slowly because of the poor state roads and atmospheric humidity. Despite this, to the period ending 18th of May the national harvest is over 40%, above the average of the last 5 seasons (38,5%).
2017/2018 wheat season has started
Wheat seeders started up in the north of Argentina covering 2.8% of the wheat national area to the period ending 18th of May (Buenos Aires Grain Exchange report). Meanwhile, in the core region high water table level and soil humidity boosted the risk for wheat sowing, being the optimal planting date May 25th. However, the increase of planting intention in the core area remains firm in the range of 5-10% over the previous year. The planting window extends until early July, so unless an event of relevance occurs, planting could be completed. There is another scenario in Buenos Aires and La Pampa provinces, where there are severe problems with water excess and wheat sowing intentions might not be completed