16/17 MY corn purchases by the export sector in the week ended as
November 15 totaled 287,000 tons, being 5 times higher than the same
week of the last MY. This corn volume correlates with good farmer
selling pace at the cash market. Meanwhile, soybeans maintain a low
trading volume. Crushing plants only bids for stocks deliveries in late
Atypical week, bounded in the local operations for the holiday of Monday
20th in Argentina and the holiday of Thursday 23rd in the United States.
Even so, the corn negotiation was very active in the BCR's trading floor.
The market was characterized by a greater number of buyers bidding for the
old and new corn crop. We could observe a large number of deferred
positions for corn delivery. This scenario of forward prices, which reach
deferred positions up to November 2018, has not been seen for a long time.
In recent years, the short and medium term was the main focus of the
In terms of volume, most of the operations were concentrated in corn with
immediate delivery and mainly with contractual delivery for the month of
December. The open bids closed the Friday 17th at AR $ 2,350 / tn. In the
last week the values reached $ 2,400 / tn for immediate delivery, while
traded values could be between AR$ 2,420 / tn and AR$ 2,430 / tn for both
deferred month deliveries and immediate delivery.
As it appears from the operations reported between the week of 11/17 and
11/23 until 4:00 p.m. in SIO Granos platform, operations were reported for
40,668 tons of corn to be delivered (firm price and to be fixed) in North
or South Rosario. The delivery period covers the end of November and the
entire month of December. The weighted average price of the operations with
firm price in pesos in the period indicated was $ 2,400 / tn, these
operations were similar to the BCR’s floor trading values. For November
delivery, only 2,452 tons were included in the previous total.
The largest bid volume was seen in deferred March / April contracts. The
actual bids stands at around US $ 143 / tn. The forward price curve has a
positive slope as May, falling in the months of June, July and August, to
return to higher values on September. The curve of forwards prices
offered by the buyers in the BCR’s trading floor is similar to the one
evidenced in the MATba’s futures prices.
This price behavior is mainly explained by the pattern of the local
harvest. In the months of April and May, soybean crops are harvested before
corn. Therefore, the bigger supply in these months makes the new soy crop
trading a priority. This priority it is to be expected for the new soy
crops and the big old crop, stocked by the farmers. So on, this discrepancy
in the relative supply of both coarse grains generates a bottleneck,
causing corn to be paid more on those dates to generate and fulfill corn
export commitments. Thus, the greater importance of the second corn crop in
the months after May generates this "sawn" local price curve.
Corn exports looks promising
16/17 corn purchases by the export sector reached 24 Mt as November 15.
This figure is 31% higher compared with the same date of last year. Thus,
as of November 15, the export commitments (DJVE) accumulate 22.5 Mt
(computing all varieties of corn) while at the same date last year this
value was 21.3 Mt. Comparing values, unlike the past MY, in the actual
season exporters have completely covered their export commitments, so price
increases in pesos are less possible in the short term. Even so, export
business is expected to follow the good pace evidenced so far this year,
due to the good farmer selling and acceptable export margins. According to
NABSA Line-Ups, November corn exports could exceed 2 Mt.
The priority of the corn business leaves soybeans in the background
In the last week, bids prices in the BCR’s trading floor were higher than
previous week. This increase came from a spill over in the increase of
soybeans CBOT prices. Bids started at AR$ 4,500 / tn reaching even AR$
4,550 / tn in the middle of the week. Thursday trading was almost identical
to Wednesday's due the U.S holiday. Therefore it can be said, that during
the week there were “two less genuine trading days” due for holidays in
Argentina and EE.UU.
The traded soybeans volume for immediate delivery was very low. Even so,
buyers are very interested in settling contract prices. Apparently there
would be many prices to be fixed in November and December. This could add a
premium for the available stock until the end of the year. So on, it can be
seen that contracts with prices to be fixed are twice the average of the
last 5 years as of November 15. Meanwhile, compared to the 15/16 MY there
are 600 thousand tons more of soybeans with prices to be fixed at this time
of the year.
On the other hand, in the very short term, the crushing sector is not
showing too much interest for biddings. Although the stocks held by this
sector, of 1,766,502 tons, is the lowest in 3 years for November, since
Friday 17th there are no offering prices for soymeal exports. According to
JJ. Hinrichsen, in the last week, it was a very difficult week to get
export offers from the crushing sector. The plants look very neat in their
sales while seeking to defend the premiums of their export prices. The
margins calculated by the BCR for this sector are very tight while the
farmer sales in the domestic market are very limited.