Argentine soybean farmers hold off deals waiting for trade war’s end

Soybean farmers from Argentina are delaying futures contracts this season as they wait for more certainty regarding prices. By early March, the country had only sold 16.2% of this season’s expected crops, compared with 30.5% at the same point last year. Soybean producers in Argentina are expecting a bumper harvest this year, however the Washington Beijing trade spat has caused a soybean glut, reducing prices in the market which are mainly dictated by the Chicago Board of Trade. Benchmark Chicago Board of Trade soybean futures are hovering near $9 per bushel, only about 90 cents above decade lows posted in September, according to Reuters.

DatamarNews reported that after Washington and Beijing decided to call a truce on December 1, the two countries are trying their best to thrash out deals to end the trade spat. Soybean growers in Argentina believe the outcome of the new negotiations between the two countries will improve pricing. Argentina is the world’s number 3 soybean producer and the top exporter of soyoil and soymeal livestock feed.

The “ABCD” major buyers, namely Archer Daniels Midland Co, Bunge Ltd, Cargill Inc, and Louis Dreyfus Co, which dominate global grain trade, are also in the middle of uncertainty due to delays in deals as farmers await higher prices.

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