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Argentina soy farmers wait on rising prices to sell rain-drenched crop

Published 05/20/2024, 06:58 AM
Updated 05/20/2024, 08:27 AM
© Reuters. An agricultural worker walks next to a soy plantation, in Pergamino, on the outskirts of Buenos Aires, Argentina, May 15, 2024. REUTERS/Matias Baglietto
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By Maximilian Heath

PERGAMINO, Argentina (Reuters) - In the fields of Pergamino in Argentina's grain heartland, farmer Adrian Farroni is revving up his soybean harvest late, delayed by rains that along with low prices have led to the country's slowest soy sales in a decade.

The South American country's slow pace selling the oilseed could strain the region's supply even as rival Brazil's crop is dented by major floods. Argentina is one of the biggest global exporters of soyoil and meal that are processed from soybeans.

Argentine farmers had by early May sold 31% of an expected soy harvest of 49.7 million metric tons, their slowest pace since at least the 2014/15 campaign, government data show.

"Generally we start harvesting in April, but it was drizzling and drizzling," Farroni said in his fields where two combines were working to resume harvesting during a window of cool, dry weather. "So each week, we only harvested for two days and for five days we had to stop."

Government data show that until last Wednesday farmers had harvested 61% of planted soybean area, behind even the drought-hit harvest pace last season.

A mix of poor weather and low prices has stalled sales, said Dante Romano, a researcher at the Agribusiness Center of the Austral University in grains hub Rosario. Farmers often agree to sales before the crop is fully harvested.

"It's been a really slow pace of sales, one of the slowest we've had in history," said Romano, who estimated that deals had been struck for only 12% of the soy crop, about half of the average pace for this time of year.

SOY SALES 'PARALYZED'

Farmers earlier this year were receiving around $270 per ton, Romano said, encouraging them to hold onto their soybean stocks and wait for the market to rebound.

"The producer was making a loss at those prices, which left sales totally paralyzed," Romano said.

Soy prices are now starting to recover as worries about crop losses due to flooding in Brazil and dryness in north Argentina have offset data indicating lower U.S. demand.

On the Argentina Rosario futures market, July soy futures are trading around $315 per ton, down from $350 during planting late last year, but higher than the recent lows, which analysts said was spurring a modest increase in trading.

© Reuters. An agricultural worker walks next to a soy plantation, in Pergamino, on the outskirts of Buenos Aires, Argentina, May 15, 2024. REUTERS/Matias Baglietto

Farmer Farroni, however, was betting on further soybean price hikes ahead, choosing to sell his wheat and legumes for now to get by financially, while mostly holding onto his soy.

"It's still not tempting to sell soy," he said. "Whoever can hold out and delay sales is waiting."

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