Closed a week from rising prices in agricultural marketsderived from the high risks of drought in Argentina, Rio Grande do Sul and Uruguay, as well as from the damage that the gigantic polar cold storm in the United States may have caused to wheat.
On the other hand, the opening of China generates some expectation regarding a greater future demand.
that way this week soybeans reached the highest price in six months and allowed Uruguayan producers to place kilos of the 2023 production at prices of US$ 550 per ton that are very attractive as an input/output price ratio.
The key aspect is the Argentinian productionwhich for now is estimated by the United States Department of Agriculture (USDA) at 49.5 million tons, but which will probably end up higher than 43 to 45 million. Due to the drought, the production of Rio Grande do Sul would also decreaseso that although Brazil will have a large soybean crop in its central and northern zone, it will still have some cut in the expected production.
The numbers
Soybean production in Argentina may fall from 49 to 43 million tons.
Soy Chicago July 2023.
corn production
Although with less impact, it also cuts in corn production forecast should be expected in both countries.
The USDA projection of corn production in Argentina is at 55 million tons, while in Argentina they already manage a range of 51 to 53 million as the most probable.
These cuts in production are added to the application of the soybean dollar in Argentina which led to a faster commercialization compared to previous years and to a smaller remnant. In other words, little soybeans will probably leave Argentina from January to March, another factor that strengthens international prices before the bulk of the Brazilian crop enters the market.
In the corn market, prices in Uruguay remain stable at around US$300 for the grain sent to its destination and until the new harvest begins, it will be difficult for there to be a strong movement in prices.
The wheat landscape
In the case of wheat, the shortage in Argentina and the damage to crops in the United States weigh heavily, but also there is a very abundant output of wheat from Russia that limits the rises of values. Thus, the price of wheat in Uruguay lost the reference of US$300.
The most outstanding firmness
The most outstanding firmness is that of rice in Brazil, which is already close to US$ 18 per bag and that they are also on the rise in the Asian markets. The outlook for this cereal also continues to improve in terms of production, with very good light and a price outlook that continues to affirm itself.
In the rest of the crops, the lack of rain in the first half of January is still a very important risk. Which drives prices up in the Chicago market because it can mean performance is under threat.
