Local soybean prices shot upwards in the middle of the previous week due to local industrial demand and the delay of soybean sowing because of the lack of moisture. For early corn, the rains are worth quintals; however, the shadow of La Niña persists.
After several days of stability, soybean spot prices managed to take some of the leading role off forward bids. There was practically no difference between the spot value (USD 265 / t) and the forwards for May 2018 delivery (USD 265-267 / t). As can be seen in the following graph, the gap between the spot price (CAC) and the future price in MATba, which had reached USD 15/ton in October, today was reduced to 2 dollars.
This climb to ARS$ 4,600/t triggered sales at the Rosario market. According to official sources, in the day of Wednesday, November 29, more than 70 thousand tons were negotiated to this last value with delivery at the Rosario’ terminals ports.
2016/17 MY soybeans purchases by the industrial sector accumulate 31.6 Mt (644 thousand tons more than last year on the same date). In contrast, the export sector with 9.5 Mt shows a decrease of 1.5 Mt compared to last year. In total, there are 41.2 Mt of purchased soybeans, which represents 72% of the soybean production and signals a fall of 903.000 tons y/y.
2017/18 MY soybeans purchases of both sectors, the export and the industry, total 5.9 Mt of soybean, doubling the average of what has been acquired in the last 5 years.
Corn, meanwhile, caught on the bullish tone of soybeans, with cash bids starting at $ 2,500 / t. Total purchases accumulate 29.6 Mt (78% of corn production 2016/17), while the new season 2017/18 adds 4.3 Mt; 450 Mt more than the average volume of the last 5 years acquired to this date.
Weather uncertainty also acted as a bullish factor in the local market. Before the rains of 29/11, early soybean presented growth stunting due the lack of water. In parallel, the sowing of late soybean had been paralyzed by dry soils. For soybean, the longer the sowing is delayed, the fewer the chances of adding quintals are. Early corn is on its way to the key period for the yield definition. Last week, symptoms of water scarcity such as leaf necrosis made themselves present. In general, although rainfalls were beneficial, it is not enough for summer crops in Argentina.