“Soybean Dollar” exchange rate pushes FOB prices down

The Export Increase Program caused high levels of purchases, which turned into exports, thus reducing prices. Upward adjustment of biodiesel prices. Corn peaks at equilibrium volume.

On Sunday, the announcement of the Export Increase Program by the Minister of Economy, Sergio Massa, captured the attention of the entire agribusiness sector. With incentives for the soybean exports, the week saw high volumes of SB purchases in the Argentine domestic market.

The high level of purchases begun to translate to external sales for the Argentine Soybean Complex. More than three million tons purchased in the first three days of the program left us with more than 621,000 tons of exports of soybeans and industrial products on Wednesday alone. In this context, the FOB prices of the main export products of the Soybean Complex, published by the Undersecretary of Agricultural Markets, fell. Between Monday and Tuesday, the FOB prices for nearby SBM shipments fell 16 UDS/MT, more than 3%, to settle around 458 USD/MT.

However, the clearest example was seen in soybean oil, which once again fell below the nominal levels of 2021. Oil fell 106 dollars per ton between Monday and Tuesday, closing on Tuesday at 1,271 USD/MT. As the days go by, we will continue to see their effects on export prices and export quantities. For now, trades have kicked-off at full throttle, and the results are easy to see.

Regarding the market dynamics this week, all eyes were on the high level of buyers in the local market. At the same time, prices started above $72,500 USD/MT for the highest offers.

Plan extension and bullish adjustment of biodiesel prices

The Secretary of Energy launched the week with news regarding Argentine biodiesel. On the one hand, Resolution 638/2022 extended the “Additional Transitory Mandatory Blend Regime for Biodiesel” (COTAB, in Spanish) for 60 days, ensuring a consolidated blend of 12.5% for the domestic market for two more months.

Meanwhile, Resolution 636/2022 increased biodiesel prices by 11% compared to the August value, reaching a $220,000 per ton. The price trend of Argentine biodiesel in 2021 showed a fixed value from May to November, resulting in a significant drop in value due to the ongoing inflation in Argentina.

Corn peaks in its equilibrium volume

Maize closed on Thursday under 60,000 tons sold abroad. It was Soybean that stepped into the spotlight, with the launch of the Export Increase Program, which proposes a new exchange rate applicable to soybeans and its byproducts. Corn, on the other hand, continues to face the considerable limitations imposed by the “Equilibrium Volume” determined by the Ministry of Agriculture, Livestock and Fisheries (SAGyP), as part of the export quota.

With total sales already exceeding 90%, from now on, all corn sold must be shipped under the DJVE-30 regime, meaning that the cargo must be shipped within the following 30 days after the export takes place.

Source: https://bcr.com.ar/

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