because they predict an impact on the dollar

A trade war that takes place thousands of kilometers from the city of Buenos Aires puts pressure on the exchange rate and, in parallel, Soy strike, one of the main pillars of the official strategy to maintain the dollar content, facing the elections.

The tightening of tariffs and imports imposed by the United States and China, as well as the serious health crisis of the Asian giant's pork sector – which in turn causes a collapse of its grain imports – formed a badtail that strikes entirely at the price of raw materials as well as the currencies of emerging countries.

And this picture comes at a bad time for the government, given that it is in full countdown to the elections, trying to control the exchange rate and with a central bank looking to show the market that he has the firepower but without the intention of having to sacrifice reserves.

As reported iProfesional, the head of the monetary entity, Guido Sandleris, bet to contain expectations by showing that he has enough dollars to intervene, but hoping not to have to sell currencies and avoiding to show a sign of weakness that drives the market. to test the BCRA, a scenario that could trigger greater green bleeding.

However, in this complex strategy game that Central is developing, the international market complicates the official plan: the announcement of US President Donald Trump, who foresaw that he could impose heavy tariffs on Chinese products, revived commercial struggle that seemed set and altered markets.

The reaction was immediate: before the fear of an escalation between two of the greatest powers in the world, markets fell and currencies in emerging countries were devalued. And the dollar in Argentina has risen again, up to about 46 dollars. And while the entry of foreign currency by exporters has somewhat calmed the waters and capped the rise of the greenback, the scenario that was opening up is generating uncertainty among badysts.

It happens that the impact of the competition between the United States and the Asian giant has a side B: they suffer – and a lot – of raw materials, starting with soy. The first product exported by Argentina is not only important, but this sector has the heavy backpack that allows it to provide "real" dollars in the race for elections.

And the scenario is not encouraging for the government: Monday in Chicago, the oil company has reached the lowest price in a decade, although it has subsequently reduced its losses.

The problem faced by macrismo, in full liquidation "agro-dollars" of "high season", is multiple: lowering the price, it also reduces the projected value of the crop.

Thus, in full volatility of the exchange rate and a falling oilseed price, the context is pushing more producers to bet on a "wait and see" strategy; or, says in Creole, to "sit" on the crop.

The director of Agritrend consultancy, Gustavo López, one of the most listened voices in the sector, sent a strong message: "The government should be worried: the price of oilseeds is falling, which will reduce a little But the most important thing is that it causes much more caution on the part of producers, who are now less in a hurry to get rid of the goods. "

International market "conspires" against BCRA

On Monday, soybean futures ended the session lower, reaching its minimum level of the last seven months, after reaching the worst record of the decade.

What triggered this fall is the Trump message via Twitter that it would increase customs duties on imports of Chinese origin for $ 200 billion.

"The threat from the United States, which has caused a mbadive liquidation of stock markets and commodities, has been added to recent pressures related to US farmers' expectations that part of the area dedicated to soybeans would be altered," he said. they added. of Rosario.

The world could therefore participate in a new mega-cereal campaign around the world, which would build stocks.

This, in a context of slowdown and, what is even more worrying, of the Chinese economy, the pork sector is experiencing a health crisis which makes foreseeable a sudden fall of its needs in cereals.

According to economist Gustavo Garzón, of IERAL, China, a crisis would have erupted as a result of an outbreak of African swine fever (ASF). This has resulted in a sharp decline in imports of soybean meal for animal feed.

More specifically, purchases by the Asian giant oilseed complex fell by 26% between November and March compared to the same period of the previous year, which is equivalent to about 10 million tonnes less.

"If this engine slows down or, even worse, goes off, as happens this year, This is bad news for global suppliers of vegetable protein, including Argentina.", Garzón Alert

"This combination of plenty of supply and slowing grain purchases from the Asian giant is being felt this year at international prices." For Argentina, it is not a question of A minor problem because it is its main export complex, "adds the expert

The price suffers

Trump's tweet was enough to give a last push to soybeans, which reached $ 295 a ton in Chicago, its worst level in a decade, although it subsequently reduced its losses.

And the reality is that at the national level, the culture of the stars shines for some time: last year, when the campaign began in Argentina, the ton in the enclosure of Rosario was trading at 280 USD. However, in January, the price of delivery in May had already been set at $ 250, according to Lopez.

"The worst thing is that they are now paying just under $ 210 per tonne. This is a very significant decline, with current value well below initial expectations. That's why more producers are waiting for the price to improve or the dollar to rise"he says.

In this context, the consultant Salvador Di Stéfano, who preaches strongly in the rural sector of the Greater Rosario region, also warned that "the soybean continues to decline and we do not know if it is the soil".

Many grains for sale

The problem is that this contraction is effective when most of the production remains to be marketed and in a context where statistics still do not give tranquility to the market, even when, on Monday, they entered currencies that have somewhat calmed troubled waters City:

– According to CIARA, US $ 1.915 million was liquidated in April. Although this figure is 39% higher in the same month of 2018, this level is almost 13% lower than the average of the last five years.

– If you look at the accumulated accumulation since January, the grain companies sold $ 6.1 million. This is a good figure, but it does not correspond to the mega-crop achieved this year because it implies a decrease of almost 1% compared to the same period of 2018 and a contraction of more than 10% by compared to the average of the last years. five years.

"This is a consequence of the fact that producers have chosen to disengage corn and wheat first and retain as much as possible."adds López.

And these statements are based on official data provided by the Agri-Food Secretariat, which confirms the slowness with which the rural sector is getting rid of the commodity:

– In particular, according to the latest published data, exporters and industry bought 16.9 million tons of soybeans, compared with a production of 56 million.

For example, the product-to-product ratio is 30%, about two points lower than the average of the last five years.

Not only that: with nearly 20 million tons more than the previous campaign, The volume sold by producers is almost identical to that of last year.

Thus, today, there are more than 32 million tons of soybeans in the domestic market, to which are added nearly 27 million maize.

"The country man sees a very low price and expects a rebound hard to badert, he does not want to use future markets, and he fears that the government does not control the dollar. It immobilizes and delays decisions"Warns Di Stéfano.

Harvest is cheaper

According to IERAL estimates, every $ 10 that oilseeds fall into the international market will reduce the value of the crop by $ 550 million.

Given the price agreed at the beginning of the year, this implies that over the past four months, the exporting complex has already resigned from more than US $ 1,600 million.

It is true that there is specific support for a mega-crop behind and that producers have certain financial emergencies that suggest that the pace of liquidation can be accelerated rapidly. However, for the experts, several factors should concern the government.

Today 's photo shows that the dollars entered so far are below average in recent years. producer sales are also delayed and the international price falls, lowering the estimated value of the crop.

As some badysts point out, the tension is not so much due to the concrete flow of currencies as to expectations and fears that the Central Bank will have to intervene to contain the exchange rate and that this triggers signals from investors. # 39; alarm. true firepower of the entity.

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