China secures 10 more soybean cargoes from Argentina

14 Sep 2022 | Liliana Minton, Cai Chen

China-based traders have bought another ten cargoes of Argentinian soybeans, trade sources have told Agricensus Wednesday, continuing an arbitrage opportunity that has already seen some 20 cargoes booked by the world’s largest soybean importer last week.

Strong trading activity has marked the Argentine market in recent days, after the government relaunched a foreign exchange-based incentive designed to encourage farmers to sell soybeans. 

A total of 5.7 million mt of Argentine soybeans have been sold since the start of the implementation of the new 'soy dollar' on September 5, with new soybean sales estimated at 2.87 million mt, according to data from the Rosario Grain Exchange (BCR).

“The prices of Argentine soybeans are very cheap currently... China’s buying pace was too slow before, and now starts to speed up,” a Chinese analyst told Agricensus.

The price levels for the latest purchase were below 290 c/bu over November futures on a CFR basis, with some at 287-288 c/bu, significantly lower than 385 c/bu for Brazilian soybeans and 365 c/bu for the US Gulf, according to Agricensus assessments.

“Cargos sold to China are a combination of greater liquidity in Argentina due to the sale of the producer, improvement in crush margins in China and a delay in the entry of North American soybeans,” an Argentina trade source said to Agricensus.

The soy dollar has incentivised soybean farmers to sell beans now, as the current scheme ends at the end of September, but rumours of a potential extension of the scheme have started circulating in the market.

However, Argentine officials have denied an extension to the ‘soy dollar’ and has asked market participants not to feed ‘fake news’ as rumours start to gain ground.

“As we said from day one, the exchange rate regime adopted this month is transitory and will not be extended… Let's not feed fake news that does not contribute anything to the work we have been doing for the growth of the economy and the productive sectors,” Juan Jose Bahillo, Agriculture Secretary, said on his social media account.