Argentina's soybean farmers are holding back 21 million tons of soybeans.
Since February 2013, Argentina's farmers have been reluctant to sell their harvested soybeans and are holding them back as much as possible. The main reasons for this are what they see as excessively high export duties and the country's high inflation rate of over 25%. Of the almost 50 million tons of soybeans harvested, more than 21 million are still being stored in silos. Export taxes represent a significant part of the national budget and the government is now experiencing financial difficulties. The Argentinian farmers' association is banking on this in the hope that the government will relent.
However, soybean prices have now fallen from $592 to $498 per tonne, a loss of no less than 15%.
The further prospects on the soybean market indicate an even more drastic fall in prices, so that the delaying tactics will no longer pay off so well. In addition, there will soon be a need for financing for reseeding in September and inputs will also become more expensive due to inflation. From an economic point of view, it is therefore high time to end the sales strike if you don't want to end up paying a lot more.
The delayed deliveries from South America coincide with the new record-breaking US harvest. This is leading to the expected low prices, which are already priced into the forward prices from September.
90% of Brazil's export volume sold
The record soybean harvest in Brazil amounted to over 80 million tons. Initially, loading difficulties due to port worker strikes and delays caused by truck drivers prevented rapid sales. At the same time, there was speculation of a drought in the USA, which has not yet materialized. Expert estimates assume that only limited quantities will be made available for export in fall 2013, although final stocks are estimated to be high.
The fall of 2013 will lead to a large supply of soybeans, as the prospects for the US soybean harvest are record-breaking.
