Argentine Situation Could Be Bullish Wheat But Bearish Soybeans
Defeat for the Kirchners in Sunday's mid term Argentine elections is being seen as a massive protest vote by your average Argentine. José Public now has a lower per capita income than his counterpart in neighbouring Chile.
“With all respect to our President, I hope you have heard the message of the Argentines in the polls and beginning tomorrow you will convene us to dialogue”, said the Mayor of the City of Buenos Aires, Mauricio Macri emerging from Sunday’s mid term election as one of the strongest 2011 presidential hopefuls.
The adverse results were not just limited to the province of Buenos Aires, or the poor showing in the city of Buenos Aires either, it also included defeat of the Kirchner candidates in three leading provinces, Córdoba, Santa Fé and Mendoza, and even in Patagonia’s Santa Cruz, the stronghold of the ruling couple.
The Kirchners might have dipped out in the mid term elections. but they're still in power, for now. The newly elected members of Congress will not take office until December, so uncertainty looms over how they will govern during the next five months.
Argentine farmers are continuing a silent protest by planting the smallest wheat crop in history. Production this year will do well to exceed 6 MMT, that's the level of national consumption, leaving nothing to line the Kirchner's export coffers.
Drought and taxes have also decimated the beef industry. Famously carnivorous Argentina, which was once the world's largest exporter of beef will also now have to import beef next year, perhaps several million tonnes, much of it coming from its tiny neighbour Uruguay.
The upshot of all this mayhem seems to be that Argentine farmers will sit on their hands for the next few months, before planting the largest soybean crop in their history.
Once wheat planting is out of the way, they don't begin planting corn and sunflowers until September, followed by soybeans in November/December. Already there is talk of a 20% increase in soybean plantings from 2008/09, and remember that they were talking a crop of 50 MMT before the drought set in. That could give us production next year of 60 MMT, almost double what they've just harvested.
All this of course is very weather dependent, but note that the 'likely' El Nino event being talked about might bring drought and misery for Australia later this year, but could potentially bring plentiful rainfall to Argentina.
“With all respect to our President, I hope you have heard the message of the Argentines in the polls and beginning tomorrow you will convene us to dialogue”, said the Mayor of the City of Buenos Aires, Mauricio Macri emerging from Sunday’s mid term election as one of the strongest 2011 presidential hopefuls.
The adverse results were not just limited to the province of Buenos Aires, or the poor showing in the city of Buenos Aires either, it also included defeat of the Kirchner candidates in three leading provinces, Córdoba, Santa Fé and Mendoza, and even in Patagonia’s Santa Cruz, the stronghold of the ruling couple.
The Kirchners might have dipped out in the mid term elections. but they're still in power, for now. The newly elected members of Congress will not take office until December, so uncertainty looms over how they will govern during the next five months.
Argentine farmers are continuing a silent protest by planting the smallest wheat crop in history. Production this year will do well to exceed 6 MMT, that's the level of national consumption, leaving nothing to line the Kirchner's export coffers.
Drought and taxes have also decimated the beef industry. Famously carnivorous Argentina, which was once the world's largest exporter of beef will also now have to import beef next year, perhaps several million tonnes, much of it coming from its tiny neighbour Uruguay.
The upshot of all this mayhem seems to be that Argentine farmers will sit on their hands for the next few months, before planting the largest soybean crop in their history.
Once wheat planting is out of the way, they don't begin planting corn and sunflowers until September, followed by soybeans in November/December. Already there is talk of a 20% increase in soybean plantings from 2008/09, and remember that they were talking a crop of 50 MMT before the drought set in. That could give us production next year of 60 MMT, almost double what they've just harvested.
All this of course is very weather dependent, but note that the 'likely' El Nino event being talked about might bring drought and misery for Australia later this year, but could potentially bring plentiful rainfall to Argentina.