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25/10/2017 0:00 - Agricultural Commodities Market
SOFÍA CORINA
Bullish sentiment triggers sales of new crop

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 demand.

· 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 year.

 

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.

 

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Institutional Video of the Bolsa de Comercio of Rosario (Rosario Board of Trade)

 Rosario Board of Trade

The Rosario Board of Trade is a centennial institution located in Rosario, in the most important agroindustrial zone of Argentina. Throughout its history it has created and boosted transparent, solid and reliable markets: the Grains Physical Market, the Futures Market, the Capital Market, and the Livestock Market.

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Bolsa de Comercio de Rosario Córdoba 1402 - S2000AWV
TE: (54 341) 5258300 / 4102600
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Rosario - Santa Fe - Argentina

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