Argentine soybean mill workers strike creating unease in global meal market

A national strike by Argentine soybean mill workers has triggered volatility in the global meal market, with uncertainties looming over the size and duration of the labor action just before the start of a harvest already expected to fall short of initial projections.

The possibility of a strike in Argentina has intensified since the end of February due to wage negotiations involving Vicentín, which was once one of the country's leading soybean processors. The SOEA union had threatened a national stoppage, but President Javier Milei's government implemented a mandatory conciliation earlier this week.

Late on March 12, however, an incident between the Coast Guard and workers at a biodiesel plant in Rosario led SOEA to announce a strike involving processors and terminals in this region, which is the country's main agricultural commodity export hub.

"The oilseed union has just declared the shutdown of all factories and ports in the Rosario area," said the Argentine Oilseed Industry Chamber via its social media channels. "Let us remember that we are in mandatory conciliation. It is illegal to shut down the plants."

The news caused soybean meal futures contracts on the Chicago Board of Trade to surge more than 2%, given that Argentina is usually the largest global exporter of soybean byproducts.

Negotiations in the FOB Up River cargo market, meanwhile, March 13 nearly came to a standstill, with traders avoiding positioning amid the uncertainties generated by the strike.

On March 12, prior to the strike announcement, Platts assessed the price of FOB Up River soybean meal for April shipment at $330.91/mt. The port differential for this loading was pegged in parity with futures on the CBOT.

Platts is part of S&P Global Commodity Insights.

Crop size

The strike occurs at a relatively delicate moment for Argentina, as the 2024-25 soybean harvest is about to begin, with fieldwork typically intensifying from April.

In this context, the Rosario Stock Exchange has lowered its production estimate for this year by 1 million mt, to 46.50 million mt.

In a report published March 12, the BCR stated that "a strong rebound in yields was observed in the central region" due to recent rains. However, "the water arrived too late for the rest of the region."

For now, estimates from Commodity Insights analysts point to an Argentine soybean harvest of 48.50 million mt in the 2024-25 season, with soybean meal production and exports of 34.30 million mt and 30 million mt, respectively.

"Recent heavy rains in key producing regions have replenished soil moisture, with some regions experiencing localized flooding," the analysts wrote in Commodity Insights' Weekly Soybean Complex report published March 7.

"We see a small upside potential to our production forecast of 48.50 million mt," the analysts added.