Soybean harvest lost up to US$300 million in value due to falling prices

Soybean harvest lost up to US$300 million in value due to falling prices
Soybean harvest lost up to US$300 million in value due to falling prices

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“Everything collapsed.” The climatic future for the United States had an impact on the Chicago Stock Exchange over the last two days. Although after the abrupt drop the day before yesterday that took it to the lowest value since October 14, 2020 Corn cut part of the loss, soybeans were back in negative territory on Tuesday. And so, in two days, the August position in that market has already lost US$12.86 per ton to end at US$415.66 per ton. Meanwhile, November, in the last two days, fell from US$415.1 to US$396.83, a loss of US$18.27 per ton and one mark below the US$400 barrier. Sources in the sector recalled that this last position had been trading above US$400 since mid-June 2021.

According to experts’ calculations, with the external declines, the export value of Argentine soybeans is already lower. The Group Some US$220 million would be lost. Various sources have indicated that between the grain delivered with a price and what is missing to add value, there are more than 36 million tons. For Gustavo López, from Agritrend, meanwhile, the loss of value ranges from 250 to 300 million dollars. In cornmeanwhile, the calculation is impossible to do because we are in the middle of the late corn harvest (70% of the planted area) and nobody knows what the yield and final volume will be due to the damage caused by leafhoppers.

For Eugenio Irazuegui, responsible of research of the runner Women, The main reason for the depression reflected in forage prices is the good condition of American crops, which enables to dream of a very good 2024/2025 harvest. It is so that the Investment funds took advantage of this situation and liquidated long positions during trading, accentuating the drop in prices.

On the other hand, said Irazuegui, regarding soybeans from the agricultural attaché of the United States Department of Agriculture (USDA) based in China “anticipate a more moderate pace of imports for the 2024/25 business cycle.”

“In the first instance, they forecast some 103 million tons, adopting a noticeably more cautious stance than the last monthly publication of the USDA which pointed to 109 million tons,” explained to THE NATION.

For Eugenio Irazuegui, the main reason for the depression reflected in forage prices is the good state of American crops, which allows us to imagine a very good 2024/2025 harvest.Shutterstock

“Due to the updated weather forecasts, which ensure regular water supplies until at least next Monday, the 22nd, there may be some remnants of Hurricane Beryl that could lead to episodes of rainfall of limited magnitude by the end of this week. The weather factor begins to gain importance as the weeks go by, since the crops are close to the pollination stage. In this way, The probability of the 24/25 campaign yielding a more comfortable supply scenario in the United States is increasing,” explained Irazuegui.

In this context, he analyzed for Argentina: “Specifically in the case of soybeans, with the recently concluded harvest, approximately 1000 tons of soybeans would be left unsold in the hands of producers. 28.45 million tonnes. Based on the values ​​currently traded on the international market, this implies a total valuation of US$12.49 billion. On the other hand, if we add the pending transactions (without established price) the amount rises to 36.90 million tons.

Along those lines, Gustavo López, market analyst at Agritrend, He recalled that last Friday the market had ended very high, but that yesterday “everything collapsed.”

“It is fluctuations are totally related to how the weather is in the United States. It was raining in many areas and those precipitation took away all the support that the price had. Everything was very complicated, everything was very dry and there was a lot of anxiety,” he explained.

Gustavo López, market analyst at Agritrend, recalled that on Friday the market had ended very high, but that yesterday “everything collapsed”: “These fluctuations are totally related to how the weather is in the United States.”

For Lopezthis scenario will continue until the end of the year. “When people thought it was going to be 67%, Corn already appears with almost 68% between good and excellent. Last year it was 55% and it was a relatively good harvest. The same thing is happening with soybeans, which are at almost 70%, compared to the 67% they were expecting and 50% last year. There is no denying that the situation is good. And, on the wheat side, which also plummeted, it seems kind of absurd because in reality it is an area a little further away from the corn belt, but what we are seeing there is that they are rapidly clearing the crop, there is already 63% harvested, while last week they were at 54%, but last year they were at 43%. So they are saying that they are actually going to have a very good harvest,” Lopez said.

In this regard, he insisted that These ups and downs will continue to occur as every year, depending on how the weather continues. “It is totally, as they say, and weather marketa climate market. If this situation continues It is difficult for prices to recover, unless there is a more serious climatic problem, but for now we do not see that,” he stressed.

Nicholas Udaquiola, director of the consulting firm AZ Group, went further and He added other variables, such as international politics, to the climate factor. In this context, he noted that, Apart from the agricultural commodities outlook, the general framework was negative.

“It was a bad day for the market in general, not only for commodities, but also for metals, energy, oil, except for gas. The picture is that it was a bad day from the point of view of investors, probably political factors are behind all this short-term outlook,” said Nicolás Udaquiola, director of the consultancy AZ Group.Archive

“It was a bad day for the market in general, Not only for commodities, but also for metals, energy, oil, except for gas. The picture is that it was a bad day from the investors’ point of view, probably the political factors They are the ones behind all this short-term vision, like the election results in France and the vision of a United States that is also uncertain about what will happen in terms of elections, with a Biden who still, although he has not resigned his candidacy, does not have very strong support from his own party. I connect it a little more with that side,” he said.

However, he stressed that when one looks at yesterday’s data and looks for the fundamentals of the grain market itself, one finds that it improved. the condition of soybean and corn crops and what “This year’s evolution is different at least from this reversal that is taking place.”

“It is different from what it was in the last three years and also from 2019 and 2017: an evolution of crop conditions that, although it is worse than it was at the beginning or the initial period, is evolving quite positively, with a relatively friendly climate. Today’s photo, with more friendly temperatures than expected and with good and constant rains, the weather helps. So the combo is clearly not positive”, he stressed.

“There is data on shipments in the United States, depending on the crop, which were better than expected, but somewhat below last week. So With funds sold off again, the world is not finding the support to reverse for now,” he added.

In conclusion, for Lorena D’Angelo, grain analyst from the same consultancy, what happened yesterday in Chicago, which spread to the local market, It was mainly due to profit-taking after last week’s gains, which were shorter, and also due to changes in weather forecasts that would be leading to better conditions. He recalled the USDA monthly report that came out on Friday, in which the The market is discounting that corn and soybean production will be adjusted upwards, as well as final stocks, and higher production is expected.

“Yesterday the Chicago market suffered a significant blow in prices and this was reflected in the local market. Last week there was concern about the forecasts for the entire month of July, which predicted high temperatures and low rainfall. Now it is developing not with those forecasts, but with forecasts of rain and support for crops,” explained Lorena D’Angelo, analyst at Grains.Marcelo Manera

“Yesterday he The Chicago market took a significant hit in prices and this was reflected in the local market. Last week there was concern about the forecasts for the entire month of July, which predicted high temperatures and low rainfall. Now it is developing not with those forecasts, but withwith forecasts of rain and crop support. And the United States Department of Agriculture (USDA) report highlighted that the The condition of both corn and soybean crops in the United States improved from good to excellent, one point compared to the previous week. This being confirmed, resulted in a decline in the market. That led to Prices will fall due to this advance and also due to calm demand, mainly from the United States,” ended.

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