While the market awaits another version of the export incentive program, for analysts it will not be viable until May. Corn, between the keys
By Carlos Keller
02/23/2023 – 1:00 p.m.
The market already considers that it is a matter of time before the Minister of Economy, Sergio Massa, launches a new edition of the soybean dollar, the third since he took office in July of last year. Presented as an export incentive program, The “soybean dollars” have had the main objective of giving grain exporters an incentive to settle dollars in advance that, without an improvement in the price, they would have done so later.
The novelty is that according to analysts of the agricultural markets, on this occasion It is not ruled out that it is “dollar soy” and something else. It gives the impression that with what is left of that oilseed in the silos it would not be enough for what the Government is looking for, which is to increase the reserves of the Central Bank.
Andrés Reschini, from the consulting firm F2 Finanzas, considers that “soybeans alone will not reach the Government.” On the other hand, the wheat that could enter at this time was also sold last year in advance, what would remain ahead is the corn.
Soybean dollar 3: corn, among the keys to increase reserves
In the coming weeks, the sale of prime corn will begin, which could be subject to some price improvement, which is located in the Rosario market in about $50,000 a ton.
It’s nothing for free an improvement in the price of corn will translate into an increase in internal prices in all derivativesas is the case of oil and flour, and food for birds and animals.
Salvador Di Stefano argues that that soybean dollar would not arrive for now: “The government has few reserves and without the possibility of a new soybean dollar before the May harvest, everything suggests a tightening of the stocks, import restrictions and a market for imported products that is positioning itself with a dollar of $356, when in truth it should work smoothly on a $200 dollar. More inflation in sight.
Massa launched the program known as the “soybean dollar” in order to encourage the liquidation of producers’ earnings.
For many operators, the appearance of a new “export incentive program” is a matter of days, given the urgency of the Central Bank to add reserves and present some more or less detailed numbers towards the end of the first quarter to comply with a goal of US$7.7 billion.
How much could the soybean dollar be sold for?
Di Stefano points out that if we were to have a soybean dollar in March, it would have to be at a minimum of $260 to be attractive. If it comes out in April it should be $280 and if it comes out in May it should be $300. With this expected progression, no one will sell soybeans while waiting for the new window of opportunities that the government offers the producer.”
And there is another serious problem with wheat. In 2022, the government allowed exporters to close operations in advance to anticipate withholdings in order to meet the fiscal deficit goal agreed with the IMF. It was thought that there would be a harvest of 22 million tons of wheat, but due to the effect of the drought only 13 million tons remained used in the domestic market.
“The exporters bought the merchandise thinking that they could export it. Today they cannot export, because if they did, they would leave the domestic market without merchandise. Exporters have no incentive to buy or sell merchandise in our market, they were bought, unable to export, and advanced taxes,” explained the consultant specialized in agricultural markets.
With that the economic team is running out of “the rabbits” of the galley that up to now they have been saving from defaulting with the IMF.
A “tail breeze” favored Argentina at the start of the year. “Improved growth prospects for 2023 have provided a more solid foundation for the demand for raw materials for the coming months. Estimates of expected growth for 2023 were recently adjusted upwards as a result of the reopening of China and the lags of an economic activity in 2022 that is more robust than expected”, Balanz points out in one of his latest reports. This implies a little more price in the short term, although the long-term trend is influenced by the policy of the central banks of the developed countries, who are going to keep interest rates high to continue the deflationary process.
