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After hitting contract lows weeks ago, both soybeans and corn in Chicago have been posting successive bullish days that have allowed them to recover part of what they have lost. The question that arises is whether the gains are due to a change in trend or whether it is just a technical rebound due to funds exiting their short positions. Time will tell. In the meantime, let’s see what the analysis of the current price situation and the projections for 2025 tell us.
Between the 26th of last month (a contract low of US$142 per ton was reached) and the close of last Wednesday (US$154), corn in Chicago accumulated an increase of 11 dollars per ton. In the same period, the available position of corn in the Matba Rofex grew 4 dollars per ton (from 174 to 178 dollars). It can be seen that corn in Argentina capitalized on only 36% of the improvement registered in Chicago.
In the case of Argentine corn, it must be considered that the theoretical FAS derived from the FOB value is US$164 per ton, while exporters are paying US$178 per ton. Here we have the main reason for the distortion between the Chicago trend and that of our market.
Exports are working at a counter-margin (loss) of US$18 per tonne. Validating 100% of the Chicago improvement would imply an increase in losses for exporters. To balance the current counter-margin and avoid further losses, the current price of available corn (the real FAS) This is equivalent to a 5% withholding tax, instead of the 12% currently levied on foreign sales of forage.
Corn exports are working with a negative margin of US$18 per ton and validating 100% of the Chicago improvement would imply an increase in losses for exporters. Marcelo Manera – THE NATION
Let’s see now what the future tells us, Corn in Chicago is showing an improvement of US$18 per ton between the April 2025 position (US$170) and the first future contract, which is December 2024, (US$153). And here comes the surprising fact, the value of corn on the Matba Rofex for the April 2025 position (US$178) is trading at the same level as available corn (US$178).that is, it is not following the same upward trend shown by Chicago.
There are many issues to be defined in our country between now and 2025: lifting the restrictions; currency unification; retention policy, and maintaining the 80/20 dollar rate, among others, which are influencing uncertainty among operators.
Let’s now look at the same analysis for soybeans. Between August 15 (US$352), the day of the contract’s low, and Wednesday’s close (US$374), the oilseed in Chicago accumulated a rise of US$22 per ton. In the same period, soybeans available at Matba Rofex increased US$13.50 per ton (from US$303 to US$316.50). That is, while Chicago added US$22, the local market gained US$13.50, equivalent to 61% of the external increase.
With the new Argentine soybean harvest as a reference, Chicago has registered an increase of US$17 per ton between the US$373 at which the oilseed is quoted today and the US$390 marked by the May 2025 position. And here comes the other surprise, in the same, the local grain drops US$28, from the US$316.50 of the available position to the US$288 of the May contract. There is a mathematical explanation here, The oil industry is reluctant to start the new harvest with negative margins And one way to balance their numbers so that they are at least neutral is to lower the value of soybeans, which is happening.
The author is president of Pablo Adreani and Associates
Conocé The Trust Project
