The grains leave behind a bullish week and adjust downward with the arrival of rains in the areas of soybean and corn crops in the United States. In addition, the Russian wheat harvest and the record corn harvest in Brazil are putting downward pressure on values. In wool, prices in the Australian market broke the downward trend that had been going on for eight consecutive weeks. AND in the farm market the magnitude of the fall in values moderated.
Haciendas, with moderate adjustment
In the farm market closes a week with meatpacking plants proposing new adjustments for fat cattle, others do not have a price and in general there is a limited operation. Although the trend has not changed, the magnitude of the fall did moderate.
Contrary to what happens at this time of the year -with an accumulated fall of about 60 cents in the last month-, on Friday the prices moved in a range of between US$3.40 and US$3.50 per kilo for the fat steercompared to US$3.50 to US$3.60 the previous week.
Some industry with kosher slaughter equipment may pay a little more to get quality heavy cattle, the hardest to find.
In the case of the fat cow, the few deals that come to fruition are between US$3.10 and US$3.20 per kilo. Tickets are around seven days.
One of the main landmarks of the week were the episodes of rain that gave some relief to the fields and allowed water to recover. Hand in hand with water, it is expected that the supply, which is already scarce, can be further reduced.
The industry is not pressing, with an international market that is still slow but is beginning to give some positive signal. It is handled that China could be touching a value floor, said a consulted broker, with specific improvements for some cut in recent days. The European Union is also showing signs of rebound, while the United States is still not taking off, with plenty of supply from Australia and New Zealand.
agricultural markets
For now, the weekly export price fell from US$5,379 to US$4,074 per ton for beefmarking a minimum average since the first week of February, according to preliminary data from the National Meat Institute (INAC). In the first half of the year, it stood at US$4,409 per ton, 14% below that of a year ago.
Last week the fourth slaughter of the year below 35,000 heads was registered. There were 34,676 cattle, 16% less than the previous week and 13% less than a year ago.
On the replacement market, the whole calf is still the star. Marketing in this category is fluid, driven by standing exports. In the first half of the year, around 159,000 cattle were exported, doubling the volume of the entire year 2022.
agricultural markets
With the fat steer down and the calf holding out, the price ratio is at historically high levels: 1.37. This means that the calf is worth 37% more than the live steer, a value gap that has not been registered since January 2017 and that is well above the historical average of 1.18.
In wool, there is little supply and little demand, with some slight price adjustments. For lambs and sheep the values are around US$2.80 and US$2.90 per kilo. Capons and sheep are quoted between US$2.40 and US$2.50.
These minimal market movements were reflected in sheep slaughter, which last week was the lowest of the year, with only 7,352 head, leaving behind the high volumes industrialized between March and May.
Grains return to bearish logic
Grain prices closed the week with a drop in the Chicago market due to better weather conditions for crops in the United States, giving way to a logic of caution after the spikes in recent days.
agricultural markets
July soybeans reached US$ 581 per ton as a result of the decline in crops at the end of last week, lost US$ 36 due to rains in producing areas of and forecasts of above-normal rainfall for the next two weeks, which would alleviate worrying dry conditions. Friday’s close was US$545 and US$524 per ton for August,
The gap between the price of soybeans in Chicago for July and the soybeans available in Nueva Palmira is increasingly striking: around US$100 per ton.
The price of soybeans available in Uruguay is US$440 and US$432 for the next harvest. In Chicago, 2024 soybeans returned to the axis of US$480 that it reached the previous week, after touching US$492 per ton on Wednesday the 5th.
In Argentina, due to the drought this year, a record area of 6.5 million hectares between wheat, corn and soybeans was lost, which could not be harvested, according to the Rosario Stock Exchange. The soybean harvest ended with 21 million tons, and a yield of 1,650 kilos per hectare, the lowest in 15 years.
This will force the Argentine oil industry to import at least 10 million tons of soybeans from neighboring countries in order to sustain industrial activity.
agricultural markets
The December wheat position lost between Thursday and December all that it had gained in the week and returned to the range of US$ 245 per ton in Chicago.
The improvement in the condition of the spring crops in the United States and the advance of the winter wheat harvest were bearish factors in the market on Friday, as well as the large Russian wheat crop and the progress of its exports. Russia’s competitiveness increases as the ruble’s exchange rate against the dollar and euro weakens.
At the local level, wheat remains at US$ 280 per tonand barley for malting US$ 250 per ton.
Corn in Chicago, pressured by improved forecasts and the advance of the safrinha harvest in Brazil, also closed the week with a drop at a price of US$191 per ton in the September position and US$194 for December. .
The price of corn for May 2024 adjusted from US$207 to US$202 in the last day on the Chicago Stock Exchange.
In Uruguay the price of corn is still at higher levels, at about US$ 260 per tonalthough with prospects of continuing to adjust its value as exported corn enters.
agricultural markets
Wool up after eight weeks
At the beginning of the 2023/24 harvest wool prices in the australian market broke the downward trend that had lasted eight consecutive weekssomething that had not happened for 20 years.
Reluctant to continue selling at the lowest prices in recent years -similar to those of the hardest period of the covid 19 pandemic- sellers placed a number of bales between 20% and 25% less than expected at this week’s auctions .
The result was intense competition among buyers and a high percentage of sales (94%), pushing values up in virtually all categories. A similar behavior is expected in the auctions for next week, which will be the last one before the three-week recess.
In the best week of the last two months at the price level, an increase in US dollars of 3.9% was registered for the Eastern Markets Indicator (IME).
The reference closed at US$ 7.77 per clean kilo base after the two days. In Australian currency, the Aussie advanced 3.2% and ended the week at AU 11.62.
Both exporters and textiles from China, Europe and India actively participated in the market, and after the break the expectation that the upward trend will continue is affirmed.
In the local market, the Uruguayan Wool Secretariat (SUL) reported operations for Corriedale batches of 15,000 and 10,000 kilos conditioned with green griffin that obtained very similar prices for batches of 27.5 and 29 microns, between US$ 0.9 and US$ 1 per kilo fleece.
The export report for the first semester records a drop of 11% in volume and 22% in billing compared to the same period in 2022.
The fall in income is not only influenced by the notorious drop in prices in the last semester, but also by the lower proportion of tops and washed wool in total shipments. In fact, the export of dirty wool this year grew 13% in volume while tops fell 17% and avada wool 21%.
Between January and June, 14.7 million kilos were exported, registering revenues of US$74 million, with Italy surpassing China in the ranking of destinations.
