Today is the day to liquidate long January futures positions to eliminate any chance of being assigned a delivery.
Tidbits
Several agricultural input suppliers in Argentina are struggling financially or have already filed bankruptcy. The problem was the input suppliers did not change their marketing and financing program when the conservative, cost-cutting President Javier Milei took office a year ago.
The crop input suppliers did not not expect inflation to be reduced, they did not expect interest rates to decline, so they continued to operate the same way they had the past 40 years. Because inflation was getting worse every year, they continued to buy all the crop inputs they expected to sell and paid for those inputs with borrowed money early in the crop year. They expected, as always, to repay the credit with grossly inflated pesos.
Instead, President Javier Milei’s policies greatly reduced inflation so those crop input loans are being repaid with pesos with much more buying power than they had when loaned to the suppliers. Interest rates are coming down, but those loans made a year ago are still in the range of 250% interest. Lenders do not want to refinance those loans at lower interest. Imagine that...