Foreign media reported on November 23: Argentina’s agriculture ministry released a report showing that soybean sales by farmers in Argentina continued to lag the same period last year, reflecting farmers holding back and waiting for the government to implement a new round of preferential exchange rates.

As of November 16, Argentine farmers had pre-sold 1.986 million tons of 2022/23 soybeans, an increase of 120,000 tons from a week earlier and down from 3.246 million tons in the same period last year.

The USDA in November projected Argentina’s 2022/23 soybean production at 49.5 million tons, down from an October forecast of 51 million tons. The Buenos Aires Grain Exchange forecast soybean production at 48 million tonnes.

As of November 16, Argentine farmers had sold 32.46 million tons of 2021/22 soybeans, up 166,000 tons from a week earlier and lower than the 34.75 million tons sold in the same period last year.

For comparison, sales for the week ended Sept. 28 reached 1.787 million tons, bringing September sales to 13.9 million tons, as the Argentine government offered a special exchange rate of 200 pesos per dollar in September to encourage faster soybean sales , to increase foreign exchange reserves.

The Buenos Aires Grain Exchange forecasts Argentina’s soybean production to reach 43.3 million tonnes in 2021/22. The U.S. Department of Agriculture projected Argentina’s soybean production at 43.9 million tons in November, down from its October forecast of 44 million tons.

The Argentine Finance Minister announced on September 4 that from September 5 to 30, the settlement exchange rate for soybean farmers in Argentina to sell soybeans was 200 pesos per US dollar, instead of the official 140 pesos, prompting farmers to sell soybeans actively.

Previously, due to high inflation in Argentina (which may be close to 100% this year) and the continued depreciation of the currency, Argentine farmers were reluctant to sell soybeans, using soybeans as a hard currency against a weakening peso. Because Argentine farmers sell soybeans for peso income, the depreciation of the peso means it is more cost-effective to hold soybeans than to hold the peso.