Argentine soybean producers are buying more silo bags compared to previous years as they seek to stockpile production due to current low prices. According to the latest update by the Buenos Aires Grains Exchange, farmers are expected to produce 49.5 million mt of soybeans this year. The current price in the spot market is between $200-205, while the July price in the Matba-Rofex market is $217. The current price structure is making farmers defer grain deliveries. Another factor that is making producers defer soybean sales is the expectation of a devaluation of the peso against the US dollar in the future.
The international rating agency Moody's adjusted its estimates for the Argentine economy on Tuesday and now expects a 6% contraction in 2020 due to the direct impact of the coronavirus pandemic. In its previous report, it had projected a drop of 2.4%.
In another attempt to restrict the demand for dollars in the stock market, the National Securities Commission (CNV) ruled this Tuesday that the Common Investment Funds in pesos must invest at least 75% of their assets in financial instruments and negotiable securities issued in Argentina exclusively in national currency. This Tuesday, the CCL "cash with liquidation" dollar, was close to 120 pesos.
With the leadership of the banks and YPF, Argentine shares traded on Wall Street rose sharply on Tuesday, up to almost 18%, due to investors' more hopeful expectations in the sovereign debt restructuring negotiations. The most significant advances registered by Grupo Financiero Galicia's ADRs +17.7%, Banco Macro's +16.2%, YPF's +14.3%, Banco BBVA's +13.2% and Supervielle's +12.7%.
Yamana Gold (NYSE:AUY) says it entered into an option agreement to sell up to 40% interest in a joint venture formed to hold the Suyai gold project in Argentina's Chubut province. The initial deal to secure the option is for $2 million but has later amounts including $31.6M in various installments. A moratorium on mining currently is in effect in Chubut province, which must be lifted for the project to receive approval to proceed.