The fall in soybean yields in the US, drought
conditions in Brazil and the possibility of a La Niña
phenomenon were bullish factors for new crop soybeans
in Argentina. Forward purchases of new crop soybeans
are at record levels for the past five years, with 8%
of expected production already sold. However, large
stocks still weigh on prices.
The first soybean forward sales in the Rosario grain market
had their first shot at USD 260 per ton for delivery in May
2018. Now, the comfort zone is USD 265 per ton with the
possibility to get 2 or 3 dollars more. The local market
finds support in such factors as:
· The sustainable Chicago prices after an active China
· Lower soybean stocks and yields in USA.
· A lower Brazilian soybean production and the lack of
humidity for sowing.
· A lower Argentinian soybean production. Production is
projected down 2 million tons for the next harvest due to
larger corn sowings.
· The possibility of La Niña during the summer, which could
affect soybean yields in Argentina.
According to data from “SIO Granos”, soybeans for delivery
in July and November 2018 have already been traded at USD
270 and USD 280 per ton respectively. With price levels
that entice sellers to part with their beans, total
purchases by traditional buyers accumulate 4.67 Mt, the
largest figure in the past five years and a 67%
year-over-year increase. With the 2017/18 harvest expected
to come around 55 Mt, total purchases so far represent 8%
of projected production, 5 percentage points more than last
Despite interest in new crop soybeans, sales of the old
soybeans remain at a pace that will result in large ending
stocks. Latest data shows that barely 66% of production
(57.3 Mt) has been bought, below 69% for the previous
season and a 74% average for the past five years.
Bids for cash soybean have fluctuated around ARS 4,400 per
ton, a level that does not trigger a large volume of sales
of soybeans that remain stored in silo bags. As a result,
export commitments for the 2016/17 stand at 7.1 Mt, their
lowest number in 6 years.