The double crop wins bets on single-soybean crop in the Argentina core
region. In spite of recent price falls, the winter cereal combined with a
late oilseed in the same season allow to reduce fixed costs average in
rented field, surpassing the net margin of early soybean in 160%.
The possibility to follow wheat with another a crop in the same season
allows sharing of the fixed costs with late soybean, taking advantages over
the early soybean. Because of that, combined with attractive wheat prices
at sowing, encouraged fine-grain planting for the second consecutive
season. It should be noted that the good intentions of planting were not
fully fulfilled at national level due to waterlogging.
Profit margins follow price movement and per hectare yields, while costs
depend on the distance to port areas, macroeconomic variables and
productive conditions of each farmer. In addition, producers who hedge
their price risk with futures make a difference by taking good
opportunities. At the beginning of July 2017, wheat futures for December
reached USD 180 per ton; an exceptional value that surpassed the desired
prices in a normal budget. However, even with a price's wheat of up to 16
dollars less, the combination of wheat and soybean leads the ranking of the
agricultural margins in the core region.
Corn would be another of the protagonists this season. It is estimated that
the area could grow by 7% compared to last season, although excess moisture
could also be a problem for planting.
Finally yet importantly, early soybean net margins are lower than the other
combinations, even adjusted for rented fields, which have a higher risk.