September 15, 2015
Argentine Farmers have Sold 58% of Last Year's Soy Crop
The Minister of Agriculture in Argentina reported last week that Argentine farmers had sold just 58% of their 2013/14 soybean crop compared to 66% sold last year at this time. Farmers in Argentina were very slow selling their crop in 2013 and they are even slower sellers in 2014. Farmers in Argentina view their soybeans as a hedge against inflation and currency devaluations, so there are a lot of good reasons why they will continue to be slow sellers.
The slow selling though means that they will not be well capitalized as they start planting their 2014/15 crops. Soybeans have a much lower cost of production compared to corn, so farmers in Argentina may opt for more soybeans out of necessity due to lack of funds. This undercapitalization also casts doubt on just how aggressive Argentine farmers might be on increasing their soybean acreage in 2014/15.