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October 25, 2017

66% of Old Crop Soybeans Sold in Argentina, 5% of New Crop Sold

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Farmers in Argentina are just getting started on planting their 2017/18 soybean crop with approximately 1% of the crop in the ground. While they are planting their crop, they are also looking for opportunities to lock in prices for the 2017/18 soybean crop.

According to the Rosario Grain Exchange, farmers in Argentina have forward contracted 5% of their anticipated 2017/18 soybean production. While this is still a small percentage, it is the highest percentage of forward contracting at this time of the year in the last five years.

Continued selling in the future may be slowed due to a reduction in the soybean export tax which is scheduled to start in January of next year. The current soybean export tax is 30% and it is scheduled to decline 0.5% per month starting in January.

Farmers in Argentina are still holding onto a significant portion of last year's soybean crop. The Grain Exchange is reporting that 66% of last year's crop has been sold compared to an average of 74% for this time of the year. Farmers in Argentina heavily invested in silo bags earlier this year to store their soybeans in the hope of improved prices going forward.

That hope may or may not materialize, but one thing they know is that the soybean prices will start to increase as the export taxes start to decline.