The price of soybeans: what analysts predict and what will be the impact on the entry of dollars of exports to the country

In recent days, the volatility of international prices for soybeans, corn and wheat has increased. In the case of oilseeds, the value of the contract expiring in July of this year closed last week in the Chicago benchmark market, with a decline of $ 15.25 and the tonne was listed at 488.60 USD, and seven days later it recorded a rise of 1.88 USD and a price of 537.43 USD per tonne. The specialists gave their opinion on the impact of all this on the entry of foreign currency into the country and what could happen in the weeks to come with the prices.

The improvement in international prices in recent months will significantly increase the inflow of foreign exchange from agro-industrial exports. According to the Chamber of Petroleum Industry of the Argentine Republic (Ciara) and the Center of Grain Exporters (CEC) in the first six months of the year, foreign exchange reached $ 16,659.7 million, a maximum historical for the period. From a foreign exchange perspective, the arrival of agricultural dollars, more abundant in 2021 and concentrated in the second quarter, contributed to the accumulation of dollars by the Central Bank. for its interventions in the wholesale market and simultaneously dampened the official exchange rate hike to just 13.7% so far this year.

In order to Ariel tejera, head of the market analysis department of the brokerage Grassi, the report on the area planted in the United States, released last Wednesday by the Department of Agriculture of that country, seems to have generated a turning point in the markets. “We went through weeks of negative price adjustments, based on expectations of increased area seeded, from what the agency calculated as intention in March. These movements had been deepened by the disarmament of positions bought from hedge funds ”, he declared in dialogue with Infobae.

Grassi said the disruption that was generated this week in the overseas market was a consequence of data provided by the Agriculture Ministry which reflected a smaller area of ​​soybeans and a very marginal increase in corn, where 35.4 million would have been hectares planted and 37.5 million hectares, respectively.

“On this basis, and given the low initial stocks, very good yields will be required to ensure acceptable supply volumes. But, it must be taken into account that the conditions of soybean and corn crops are more degraded than last year at this time, which casts doubt on the possibility that the last yields achieved could be improved ”, he added. -he declares.

“We went through weeks of negative price adjustments, based on expectations of an increase in the area planted, compared to what the agency had calculated as intention in March” (Tejera)

In addition, he said the climate in the United States is starting to play a prominent role and will be the key variable to watch over the next two months. “A very volatile scenario cannot be ruled out if, in addition, we consider that hedge funds could continue to be very active”, underlined the specialist.

Josefina jolly, market analyst at FyO, said that The coming months are critical for the development of crops in the United States, the market will therefore closely follow the weather forecasts to accompany the good evolution for the definition of yields and any change in these will be reflected in Chicago.. “Keep in mind that we come from very high prices, with a lot of volatility present in the market which reminded us that it must be respected and that any unforeseen factor can contribute to the movements”, commented the specialists.

But for Jolly, other factors have influenced the prices lately. One of them was the issue of biofuels, which is no less important, because depending on the resolution of this conflict, the demand for biodiesel like ethanol could be affected and with it the consumption of soybeans and soybeans. But. In addition, hedge funds with positions bought in soybeans and corn at maximum levels (in the event of a bearish signal, they make the variation exponential). And finally, with the fall in prices, demand arose, with China buying soybeans from the United States, which already has an advanced pace in its soybean exports.

Exports

With these data provided by analysts on what is happening internationally with prices, recalling that the local producer perceives a lower value due to the effects of levies and the doubling of the exchange rate, According to the FyO analyst, so far in the agricultural season 2020/2021 “a good level of marketing is recorded”, both in soybeans and in corn, which exceeds the average levels of purchases at price, according to official data from the Ministry of Agriculture. “This pace was driven by a bull market and prices exceeding budget levels stipulated at the start of the campaign,” he said in a report the analyst designed at the request of this medium.

If the level of producers’ sales is analyzed taking into account the three main agricultural products (soybeans, corn and wheat) for June 30 and looking at the last 5 years, the sector has generated an average income of around 9,100 million. of dollars. So far this campaign, he has already settled nearly $ 13 billion, roughly $ 12.850 million to be exact.

And compared to what could happen in the coming months, Josefina Jolly maintains that the export declared for the months of June, July and August about 13 million tons, of which 4 million were shipped in June and commitments to ‘shipments for the next few days in total about 3 million between the ports of upstream of the river and those in the south.

“Once these levels are reached, the pace of producer sales can be expected to slow due to this year’s breakthrough, price levels that require lower volume of grain to meet financial needs and demand. advance purchase decisions for 21/22 ″, concluded

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