the data that the market follows after the rise of the blue

The liquidation of the thick crop It comes slower than expected. According to data from the agroindustry anticipated to Ambitthe settlement in May would be at similar levels to those of April, around US$1.9 billion. A fact that, at first glance, shows the delay, worries the market and could complicate the Central Bank in the accumulation of reserves.

He BCRA It bought US$59 million this Thursday, the same figure as in the rounds on Wednesday, May 22 and Thursday, May 9, the lowest so far this month. It happened within the framework of a strong volatility of parallel dollars that led them to record levels since mid-January.

“The main determinant of the evolution of wholesale dollar is going to be the liquidation of agriculture. The Government needs to start accumulating reserves for the next debt payments. If the settlement of the harvest were very low, the Government could take some type of exchange measure, which could include a discreet jump from the wholesaler, around 20% – the current gap with the cash with settlement – or a increase in the percentage that exporters can settle in cash with liquidation”said Walter Morales, president and strategist of Wise Capital. However, there is not full consensus in the market on both possibilities.

Although the Central Bank maintains the reserve accumulation processexchange rate tension It gives agriculture reasons to take its time. Not because of the devaluation expectation, but because of a greater gap in a context of less favorable international prices.

Currency Settlement: The Dollar Factor

The financial dollar, which had remained practically without significant changes for four and a half months, had its rebound several meager news –such as a surprise drop in rates, possible difficulties in paying the PBI coupon, an anticipated need to import LNG-, which, added to the delay in the Bases Law, led to the market I would begin to be cautious.

The blend scheme (80%-20%) still prevails, which consists of 80% of the dollars entering the Single Free Exchange Market (MULC) and 20% through Cash with Settlement and there are no signs of that changing for now.

“Clearly the sales levels are low, the producer expects a higher price for soybeans, wants to see what will happen with the climate market in the United States, and a higher exchange rate. Such low rates invite you to refinance debt and retain. The Government took the wrong path by communicating a reduction in rates and then a change in the monetary policy rate with a reduction in repos. Nobody understood that movement. It is likely that the producer will sell downwards, while rising he will hope to capture a better price”explained the analyst Salvador Di Stefano.

And he proposed alternative solutions: “an additional incentive should be generated for them to sell, mentioning a future reduction in withholdings, or tax benefits for the purchase of inputs for the next campaign or machinery. We believe that by July 45% of the soybean crop will be sold, but liquidation is very slow.”

Official data from Coninagro revealed that:

• As of mid-May, only 34% of the season’s soybean production has been sold. Below 36% of the previous 2 years and the average of 40% of the previous 5 years, for the same time of year.
• In mid-May, 57% of production was still sold with a price to be set. “This is probably a consequence of the low prices that have been seen in recent months and the perception of an unconvincing exchange rate,” he stated.

While soybeans sold continue to be delayed, the same situation is replicated in other crops such as corn and wheat, although in the case of the latter, it is at a better pace.

Agro: another concern for companies

Roman Danteprofessor and researcher at Austral University Agribusiness and Food Center added to this panorama that in the sector there is “nervousness” about companies who have commercial credit for inputs where marketing does not start and generates delays. “On May 30 they should have settled a large part of the paid debts and on 6/30 another stop and that is not happening. This also delays the planting decision and the purchase of inputs, waiting for a drop in input prices that occurred, but perhaps it is not what they were waiting for. That led to there not being as much need to sell quickly to finance.”

However, beyond the delay, the sector is confident that it will gradually normalize and that the expectation going forward remains optimistic: “The liquidation of the harvest has been slowed down because the weather conditions have prevented a normal advance of the harvest. . Furthermore, given the drop in input prices and the strengthening of wheat prices, expectations of improvement and profitability in this production that has awakened investment intentions. If harvest advance conditions are met, there will also be liquidation to invest“, he concluded Carlos AchetoniPresident of the Agrarian Federation in dialogue with Ambit.