Soy reaches minimum prices for more than a decade

In full liquidation of the bumper harvest, the trade war between the United States and China and a disease affecting pigs in this Asian country have led soybean to the lowest prices for more than ten years in the Chicago market, reference World. for negotiations on grains and oilseeds.

Soybean prices in July touched down by $ 291 per ton in ten and a half years. May contracts were trading at around $ 287 a tonne, down from $ 6 a barrel since Friday's close.

Chicago prices serve as a parameter for commodity prices around the world. In Argentina, a "premium" is paid for local soybeans, which may be lower or higher than this reference, depending on the particular market conditions. In this case, explains Gustave López of Agritrend, because the trade war between the United States and China can affect shipments from the country of the North – the main soybean producer – to Asia – main buyer – the contracts Argentinean soybean The Brazilian has fallen less.

Last week, US President Donald Trump announced on Twitter that trade talks with China were at a standstill and that he would apply new tariffs on imports from that country. On Monday, China responded by raising taxes on US products and markets weakened.

On the other hand, a plague that affects Chinese pork production – which feeds on soybeans they buy around the world – calls into question the quantities of oilseeds that the Asian giant will buy. "Swine fever is reducing soybean demand," said Lopez.

As a result, China will buy more pork in the world. A few days ago, President Mauricio Macri announced that Argentina would send pigs to this country, which already uses three dollars out of four beef sold abroad.

According to Lopez, the US market also badly received the production estimates issued by the US Department of Agriculture (USDA), which provided that producers in that country would turn to corn instead of soybeans. While oilseed prices are expected to rise (due to lower expected production), poor weather conditions are encouraging grain brokers to anticipate that corn planting would be delayed, putting pressure on on larger amounts of soy. request

However, if China buys less soybeans and derivatives in the United States, it should offset the swine fever-affected shipments with acquisitions in other major agro-exporting countries. "If Americans are exporting less and the Chinese are turning to South America, even if there is a lot of soy in the United States, prices will probably be better in Argentina and Brazil," he said. said Mr López.

For the moment, this expectation is not visible and local prices are subject to international fluctuations. According to Lopez, the fall in the international price would result in a lower foreign exchange income, in the order of $ 900 or $ 1,000 million.