Argentina's 2010/11 soy harvest is almost finished, but growers are hoarding millions of tonnes of beans on their farms, gambling that sizzling global prices will climb even higher. Healthy profit margins this year and a bumper harvest estimated at close to 50 million tonnes mean farmers in the world's No 3 soy exporter can afford to take a risk and keep their sales to a minimum, industry analysts say.
"Profit margins have been higher than in past years because prices have risen strongly during the course of the season. That means growers have the luxury of retaining a little bit more of their stocks," said Fernando Botta, an analyst at Agrobrokers in Rosario, home to Argentina's top grains port. Giant plastic silo bags have become a common sight across Argentina's sprawling Pampas plains as farmers speculate on a more favourable economic outlook later in the marketing year.
According to a report by the Rosario grains exchange, growers had sold 47 percent of the estimated harvest volume by last week - below the average rate of 51 percent for the same date during the last five crop years. "This season is operating very much on a forward basis," said analyst Ricardo Baccarin of the Panagricola consultancy. "At this point, they're completing those forward transactions and they're holding onto the rest."
US soy futures have risen more than 40 percent since June 2010, and farmers think strong global demand will drive them higher over the coming months. Better-than-expected weather in Argentina led analysts to lift their soy production forecasts as crops matured and plentiful rains eased fears over the impact of the La Nina weather phenomenon from mid-January onward, boosting yields.
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