Argentine election may roil commodity markets
The victory of opposition leader Mauricio Macri in the Argentine presidential election Sunday may lead to lower world soybean prices as Argentine farmers sell a glut while agribusiness sees new opportunities in a more agriculture-friendly setting.
With 98 percent of polling stations reporting, Macri — the leader of the center right Let’s Change party — had won with 51.5 percent of the vote compared to 48.5 percent for Daniel Scioli, the candidate of the the Victory Front, the modern name for the Peronist party that had run the government for the past 12 years, the Buenos Aires Herald, an English language newspaper, reported.
Argentine farm groups have bitterly opposed the government of Cristina Fernández de Kirchner and her late husband, Nestor, who had imposed high taxes on grain exports and maintained other policies that farmers said made their lives difficult.
Earlier this month, the Herald reported that both candidates promised to reduce export taxes and lift export quotas, but that Macri was “favored much more by the agriculture sector, as he has also promised to end the restrictions on the dollar trade in the first day of his potential presidency, a move that could bring the official dollar price quickly upwards, making exports even more profitable.”
Macri has also promised to reduce export taxes, although political and economic analysts have said that will make it difficult for the government to raise enough funds to operate.
But Argentine farmers have been hoarding soybeans with the expectation that export conditions would improve under a new government, and Morgan Stanley this past week recommended selling soybeans because Argentine farmers would be likely “to unload their hoards,” Agrimoney.com reported.
But Monsanto sees more opportunities for seed sales if the Argentine government overhauls agricultural policies, Bloomberg reported over the weekend.
–The Hagstrom Report