US soy is so cheap that even rival Argentina is buying it

Argentina, the world’s biggest exporter of processed soybean meal and oil, is set to bring in whole beans from the United States for the first since 2019 as declining US prices make them the cheapest in the world. 

The South American nation has purchased 88,400 metric tons of beans to be shipped during the current season, according to the US Department of Agriculture. The move comes as the harvest of a record US crop was getting underway. 

“It surprised the hell out of me,” said John Baize, an independent analyst who also advises the US Soybean Export Council. 

US shipments from New Orleans in October, for example, were about US$395 per ton on a free-on-board basis, about US$16 per ton cheaper than Argentina’s soy, according to Commodity3 data. 

Crushers in Argentina, including Glencore’s Viterra Inc, Cargill Inc and Louis Dreyfus Co, often operate with elevated idle capacity after industrial expansions over the past two decades outpaced growth in farm output as growers contend with high taxes and exchange-rate distortions. 

The crushers typically supplement local supplies with purchases from regional neighbors, mainly Paraguay and Brazil, with these imports particularly high this season, according to the Rosario Board of Trade. 

Low water levels on the Paraguay River now are limiting the volume of shipments on barges to Argentina. That backdrop might have prompted the sale of US soy to Argentina, or it could be a reporting error in USDA data, Baize said. Deliveries of local Argentine supplies also tend to slow around this time of year following the harvest that is competed around June.

The USDA did not reply to questions about the sale.