Rosario’s cash prices valued in ARS increased around 2% for wheat and corn and 4% for soybeans, although a higher US dollar held USD prices in check in the cases of wheat and corn, while soybean increased only 2%.
In the case of corn, a huge amount of grain is coming into Rosario’s terminal port. The lack of rain during the last 10 weeks in the core producing area allowed harvest to resume and advance solidly. Based on data provided by Williams Entregas, July was the busiest month of 2017 in terms of quantity of trucks that downloaded corn at Rosario’s ports.
From the start of the 2016-17 marketing year to this date, the accumulated volume of trucks delivering corn at Rosario’s Up River terminal ports is the highest on record, 30% above last year and around the same percentage higher than the average for the last three marketing years.
Over the next 15 days, around 1.5 million tons of corn are scheduled to be shipped from Rosario’s terminal ports to the world. FOB prices are very competitive for our shipments, and the activity is gaining momentum.
Concerning soybeans, the advance in local prices during last week, which registered their highest values in ARS since last January, allowed a very noticeable increase in traded volume. Nonetheless, trading of soybean this marketing year still falls behind the normal amount negotiated for mid-July.
From January 2018 up to December 2019, the Federal Government will reduce export taxes for the soybean complex at a rate of 0.5% each month, reducing the charge for the bean from the actual 30% to 18% in January 2020. In this context, crushers and exporters have bought around 29.5 million tons of soybeans to mid-July, 3% less than the previous year and 1% below the average of the last 5 crop years.
At the same time, the amount of soybean traded under deferred pricing condition is still at a record high, at almost the double of the average of the last 5 years. When it comes to soybean for the next crop year, 1.5 million tons have already been traded, 85% above the previous year though it is still true that most of it has been done under the deferred pricing condition.
Finally, wheat commercialization at the local market is still busy, even though we are quite far away from the harvest period. The rise of hi-pro wheat in the world, as more and more producing countries experience weather issues, is supportive to prices, while the rise in US dollar operates in the same way.
The previous dynamic brings an opportunity for Argentinian shipments in the near future, and local exporters are taking advantage of that accelerating the amount of their purchases. According to the Ministry of Agriculture, combining current and next crop wheat, exporters have already bought a record amount of tons. In fact, they purchased 11.3 million tons of 2016/17 wheat (two times what they had bought for mid-July last season) and 2.8 million tons of the 2017/18 crop (350% more than last year).
Industrial activity, even when it did not achieve a record level, is advancing at a healthy pace as wheat processing for May has been found to be 8% higher than in 2016. In this context, demand by industrials and exporters as well as a higher value for the US dollar in Argentina is supporting prices, which reached their highest values in Rosario’s cash market since the year 2013.