The U.S. Department of Agriculture Monthly Grain Production Projection Report (USDA) cut the forecast production in that country for the three main grains – corn, wheat and soybeans – and thus gave support to the market. But this surge on Wednesday, especially for soybeans, was relativized by two factors: the great harvest in Brazil, which was corrected upwards in the same projection, and the very strong inflation data in the United States on Thursday that predicts a brake for raw materials.
The cut in production in the United States, currently in full harvest, was important and greater than expected. The projection went from 119.16 to 117.38 million tons. Private analysts did not expect changes in the expected production of soybeans.
The projected stock remained at 5.44 million tons –below the 6.75 million forecast by the market–, since the quarterly report had raised the data on stored soybeans.
Even so the possibility of rising soybeans is limited by two factors: the scarce purchases from China and the large production expected in Brazil, where the rains continue to be very favorable and which led the USDA to correct the production projection from 149 to 152 million tons.
In the case of wheat, the United States harvest was also reduced from 48.5 to 45 million tons, but this reduction did not have the same impact on the level of reserves in the United States. The wheat stock projected at 15.7 million tons is less than what was projected in September, but the market expected a cut greater than 15 million.
In the wheat market, what is happening here and in Argentina is more important, where drought continues to threaten crops. In the case of Argentina there was also damage due to late frosts and there is talk of possible export restrictions.
This can also complicate the import needs that Uruguay may have before the next harvest arrives.
The Rosario Stock Exchange lowered this Thursday the expected production of wheat in the neighboring country to 16 million tons, 7 million less than the 23 million harvested last season.
The amount
Argentina’s wheat harvest falls by 7 million tons due to the impact of drought and frost.
john samuel
Wheat in development, in a farm near Dolores, in Soriano.
The wheat market had jumped earlier in the week on Russia’s massive bombing of Ukraine, but those fears were pushed aside as the week progressed as a market factor.
In the case of corn, the USDA also cut US production, from 354.2 million tons to 353 million. United States grain reserves in the middle of next year are projected at 29.8 million tons. The market expected a greater reduction and prices remained stable.
The grain market will remain tight, the oilseed market will wait for the Brazilian harvest and while here the arrival of a saving rain is anxiously awaited, but at this point it is already possible to begin to consider a reduction in projected yields and probably in the surface to be harvested
Prices after the United States inflation data on Thursday had a setback and no longer remain above the reference of US$ 500 per ton for next year’s soybeans (US$ 493), they are somewhat below US$ 300 for malting barley (US$295), close to that reference for the next crop’s wheat and over US$510 for rapeseed.
They are interesting prices despite falling about US$ 10 in the week, but difficult to take given the uncertainty that continues to weigh on crop yields. The market is very volatile, and particularly in wheat and corn, any additional weather issues can be very bullish..
