Soybeans suffered a sharp drop in pesos (and dollars) at the Rosario´s exchange. From Friday, June 9 to Thursday, June 15 the soybean cash market suffered a loss of $ 14.2 while in Chicago in the same period, lost US$ 1.2. The local cash price taken into account is the one published by the Rosario Board of Trade for each trading day, expressed in dollars divided by the exchange rate of each day.
If we look out at the last two weeks, we can see very different performance in prices. The weeks last for Friday to Thursdays with the unique object of making contrasts. We point out weeks marked by very strong variations in the price of local soy and not correlated with what happened with the external prices of the beans and its byproducts.
In the week of June 2 to June 8, the value of local soybeans rise up US $ 8.5 while in Chicago the same variation was US $ 9.5. When we study the data for the same periods, we passed the strong increase that took place on Thursday, June 1, of US $ 3.9, while in Chicago that day, the soybean July futures fell US$ 1.4. This means that local soybeans increased more than external prices.
In the week of June 9 to June 15, the accumulated value of local soybeans fell US$ 14.2, while in Chicago the prices only fell US$ 1.2. The data is showed at the graph attached to the note. It stands out the strong contrast of June 9 trading day, where the local beans fell more than US$ 6 while in Chicago rose at the end of the day US$ 1.3.
This reinforces what we said in the No 1811 report. The increase in the local value beans was a counterpart of the poor export margins of the export and processing sector, where the peak value that touched soybean of $ 4000 / t was due to short run factors, not only of supply rigidity, but also because the needs for supplies by the part of the processor and exporter sector.
With respect to the latter, a considerable increase in the purchases (and contracts settled prices) of the sector of the oilseed processing industry and of the exporter can be observed until June 7, where data is available. Based on weekly information provided by the Argentina’s Ministry of Agroindustry, on Wednesday, June 7, industry purchases plus settled prices for already delivered supplies totaled approximately 1.6 million tons for the first 7 days of June. On the other hand, the exporter sector bought and settled prices (priced) for 596 thousand tons of soybeans. Therefore, the total accounts for approximately 2.2 million tons of soybean purchases and prices settling for the week in question. (The total net of 2 million tons as shown in the table below, since a part of the trades accounts prices to be settled).
If we foresee the long run, ahead for this new marketing year, purchases for the bean are far behind in the schedule. Although the traded volume in recent days closed the gap a bit, we observe a big difference in the supplies to be bought and the expected total output at this at this time of the year. To get an idea of the missing trading volume, at mid-2017 more than a half of the total output is bought (41% of the total), while for example, at the same day of the last year 48 % of the total estimated output were bought.