Soybeans, Oil and Mining Favor Milei, But Interest Rates Complicate Financial Landscape

The Javier Milei administration faces a favorable external environment driven by elevated prices for soybeans, oil, and select minerals. Rising export values, combined with increased production from Vaca Muerta, have pushed Argentina's terms of trade to historically high levels.

Soybeans—long associated with the performance of Peronist administrations—have again benefited the local economy, reaching their highest peso-denominated quotation in three years. This is complemented by hydrocarbons from Vaca Muerta and mining output, with gold as Argentina's leading mineral export by total value.

However, this same international context introduces significant pressure on borrowing costs. Rising oil and energy prices have driven inflation in the United States and pushed Treasury bond yields higher. Yields on ten- and thirty-year securities reached 5.28% and 5.61%, respectively.

For Argentina, U.S. interest rates near 5.3% combine with a country risk premium exceeding 640 basis points. This structure would push the cost of a potential ten-year sovereign dollar issuance to approximately 11.7%, a level that restricts market access.

The constraint becomes more critical given scheduled maturities in 2027 exceeding USD 21 billion. The government's official financing program and announced tools must address this challenge in an environment where commodity prices support revenues, but international monetary conditions raise refinancing expenses.

Brazilian political scientists Daniela Campello and Cesar Zucco argue that voters typically attribute to the incumbent administration outcomes that also depend on global commodity and interest rate cycles. By this logic, commodity price movements can improve presidential approval, while external financial tightening can erode it even when beyond government control.