In a van, down by the river... | That would certainly be a huge slug of beans eliminated if the estimate comes to pass. As we fret over the Argy beans, however, I couldn't help but wonder what happened to the monstrous carry over stocks they had supposedly been carrying (i.e. the huge bags of beans they used as a currency hedge). According to the most recent WASDE, Argy was penciled in for a 58.5 mmt crop, and after figuring carry-in less consumption/exports, would have been left with carry out stocks of 28.7 mmt, or 36.5% stocks/use ratio. Assuming they had a chance to move all the "socks full 'o beans" to high ground, and therefore maybe losses are capped at 9 mmt (which sounds like a big IF at this moment), that would still presumably leave Argentina with about 19.65 mmt of carry over stocks, or about what they had in 2013. Since usage has since increased, their stocks/use ratio would be about 28%, or just slightly higher than they ended with in 2012. I don't have access to Argy price and basis data, but I have to wonder if this is giving those boys a nice rally to open their bags??
If we look at the global situation, the latest WASDE had the planet penciled in for a cushy 79 mmt global carry-out, or about 25% stocks/use. If we reduce that figure by 9 mmt, the stocks/use ratio drops to 22%, which is still about 2.5% over the historical average. |
Argentine crop flooding
