Closed a week of downward correction in the international agricultural market with a monthly report by the United States Department of Agriculture bringing as the biggest surprise an unexpected upward correction in Australia’s wheat production, which is heavily affected by flooding.
An improvement in the US production of corn and soybeans, which has just been harvested, and a certain recomposition of stocks, although still tight, completed the scenario that consolidated declines. The rest fell within what was foreseeable, a cautious cut for now in the forecast production of wheat in Argentina.
This week there was also a correction to even more soybean production in Brazil, given that the National Supply Company increased the forecast production from 152.3 to 153.5 million tons.
So wheat in December Chicago position lost $300 marking a two-month low.
Wheat in Chicago’s December position lost $300 to hit a two-month low.
The rains and the agreement between Russia and Ukraine affect
On the other hand, in the agricultural market affects the arrival of rains to the Argentine agricultural areas that were urgent for water. They are late for the winter crops, but they allow a start with the long-overdue planting of summer crops. And they come excellent for Uruguay.
As an upward factor, a certain reactivation of soybean purchases from China in the United States is perceived, which continues to have problems getting the grain out of the Mississippi in a historic low.
The market will not make strong movements until the continuity of Ukraine’s exports is elucidated. The initial agreement expires on November 19 and both Russia and Ukraine set conditions for its continuity, within the framework of the armed conflict.
The downward adjustment of the price of wheat has been taking place in anticipation that this agreement will remain in force.
Meanwhile, the rapeseed harvest in Uruguay is gradually picking up pace, showing interesting yields, which allow us to maintain the expectation of a new yield record for the star crop of the last two winters, probably around 2,000 kilos per hectare. The weekend rains will be important for the end of grain filling in wheat and barley and will give the green light for soybean planting.
Price references
The prices at the end of the week are located on the US$540 per tonne of rapeseed, US$512 for soybeans from the next crop, US$310 for wheat and US$280 for malting barleywhere the flexibility in quality conditions was very welcome given the restrictions generated by the lack of rain this spring.
A calmer market in prices is expected, but also calmer in terms of production if the long-awaited rains for this weekend materialize.
The amount
From 5.4 to 6 million tons of soybeansis the projected US stock in mid-2023.
From 152.3 to 153.5 million tons of soybeans is the production projected by Conab for Brazil.
