Foreign media news on December 7: According to a report released by the Argentine Ministry of Agriculture, with the implementation of the second round of preferential exchange rates for soybeans in Argentina, the soybean sales of Argentine farmers accelerated significantly last week.

As of November 30, Argentine farmers had pre-sold 2.304 million tons of soybeans for the 2022/23 season, an increase of 256,000 tons from a week ago and a decrease from 3.371 million tons in the same period last year. For comparison, 61,000 tons were sold in the previous week.

The Argentine government implemented a special exchange rate of 230 pesos to 1 US dollar for soybean sales from November 28 to December 31, in order to encourage farmers to sell soybeans and expand exports to earn foreign exchange. The current official exchange rate is around 165 pesos.

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

As of November 30, Argentine farmers had sold a total of 32.637 million tons of 2021/22 soybeans, 557,000 tons higher than a week ago, and lower than the cumulative sales of 35.329 million tons in the same period last year. For comparison, 188,000 tons were sold in the previous week.

Due to the high inflation in Argentina (the inflation rate may be close to 100% this year) and the expectation of continued currency depreciation, Argentine farmers are reluctant to sell soybeans, using soybeans as a hard currency against the weakening of the peso. Argentinian farmers get paid in pesos for selling soybeans, so the devaluation of the peso means that holding soybeans is a better deal than holding pesos.