SoyaWars™, round two comes to an end

As noted this morning, as soon as anything LatAm gets to feature in the WSJ it has to be over bar the shouting. After a three hour meeting this afternoon, the agro boyz have just announced that they will call off the strike when on Wednesday morning and go back to the negotiation table with the gov't boyz the same day. And as expected, those late to the party up North would have seen the Peso, the Merval and the bonds rally today and thought, "What's all the fuss about, Felix?"

However, this may well be just another episode in a rather boring soap opera that has more in store, as agro is still pretty pissed at the raised export taxes and will be pushing for a reduction when the two sides meet Wednesday. Word is that the agro leaders spoke unofficially with Klishtina's cabinet chief Alberto Fernandez today, and stipulated that to call the strike off the subject of the export tax hike must be on the table "seriously" the next time the two sides meet.

How to play this? Well, first I told you to short the Argy bonds, and they went down. Then on May 14th my call was to cover and go long, and sure enough they rallied in fine style. Quite frankly, those were two rocking calls. So this time the play will be flip and go short Argentina bonds again Tuesday, but not right at the bell. Let the bonds get a pop from the greenhorns, and the sell mid morning. Selling the news is the right play here, and there's every chance that the next round of talks do not go well which would turn any small gain into a big one. It all depends on the government's attitude, and whether Klishtina decides to give a little in return for a bit of peace.

Time will tell. Don't bet the farm (groan).