Soybean bulls are arguing it's going to be much tougher than the bears think for newly elected Argentine President Macri to make any type of quick impact on the market. I hear there's some real confusion surrounding the Argentine Central Bank and their current "peso vs. dollar" liquidity. This could obviously complicate any devaluation efforts and create some high hurdles that Macri and crew might not have anticipated.
I originally heard the new government was going to cut export taxes on soybeans by 5% per month. Now there is talk they might offer a couple of "tax-free" months out of the gates, then go back to the full 35% tax, then start to allow some additional reductions.
Bottom line: I'm not sure anyone really knows for certain how this is going to play itself out. I have to imagine the newly elected officials will need some time to get acclimated and defuse some of the hidden land-mines they haven't accounted for. If the headlines reveal more extreme central banking complications or increasing social unrest, I have to imagine it will prompt some of the bears to move to the sideline and create a bit of a bullish tailwind.
Unfortunately for the bulls, the overall weather in Brazil seems to be improving a bit. Yes, there are still some key production areas that remain dry, but forecasters are starting to seem more comfortable projecting more adequate rainfall in the days ahead. From what I understand, Brazil now has somewhere between 70-75% of their soybeans planted, which is improving each week, but still 5-10% behind their normal planting pace. Brazil is trying to get a record number of soybean acres planted in the ground.
From my perspective, there's still a ton of weather uncertainty remaining and no guarantees in regard to total South American production. As a producer needing to reduce more 2016 price risk, I want to remain patient in hopes an unforeseen weather event provides us a timely boost.