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31/10/2017 0:00 - Agricultural Commodities Market
EMILCE TERRÉ
US crop pressures soybean prices

With a corn crop of 117 million tons pouring into the market, seasonal pressure of the soybean production of United States over prices is difficult to toss away. Since mid-October, CBOT November soybean futures retreated more than 10 dollars, falling 4% in a year-over-year basis.

The local market echoed the fall in global prices, with MATba futures for near delivery in Rosario ports falling 2% to USD 252.5 per ton, while May futures remained relatively stable around USD 265.2 per ton. The basis between these two positions keeps increasing, closing at almost 5% past Thursday.

 

According to data from the Ministry of Agroindustry, total soybean purchases by exporters and crushers amount to 38.3 million tons, the lowest volume in three years. On the other hand, purchase for the following 2017/18 season stands at 4.9 million tons, the largest value over the past six years.

 

Because of the above, the arrival of soybean to port terminals in our area is lower than usual in past years. We can estimate from grain delivery surveys that a total 348,000 trucks carrying soybean have arrived to local ports by late October, markedly below the levels for the 2015/16 and 2014/15 marketing years of 390,000 and 412,000 units. It is worth mentioning that the previous data only records arrivals before 6 AM each day, so it might underestimate total delivered tonnage.

 

The slower pace of business and tight margins for processors has resulted in a steep drop in crushing numbers for past September, which was the lowest September since the 2014/15 marketing year with only 3.19 million tons being processed. On the other hand, NOPA data shows that soybean crushing in the US has increased for three consecutive years.

Likewise, export figures from the soybean complex in September (according to INDEC) came in at their lowest levels for the past three years with 26.5 million tons. The most remarkable fall takes place in soybean exports, with accumulated dispatches between April and September of 6.5 Million tons, 24% less than in the previous year. Shipments of meal and oil did not suffer as much, while biodiesel exports increase 10% year-to-year thanks to an auspicious beginning that ended sourly once the US established sanctions on soybean-based biofuels from Argentina.

 

Overall, the soybean market seems to have reached a temporary plateau in terms of exports, crushing and overall trading. This should result in significant ending stocks for the current marketing year, which could end up around 16 million tons. Total supply for the following marketing year could well reach a record of over 70 million tons even in spite of reduced plantings.

 

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 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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