Highlights of the physical grain market
In the local market, the strength of wheat stands out in the prices offered, while coarse grains are under pressure from the US harvest. In Chicago, the futures of the main crops followed a downtrend.
During the last week at the local business roundtable, a market with greater commercial dynamism was presented on the cereal side, with a large part of the buyers bidding for the merchandise of the 2021/22 campaign. Regarding prices, the offers were uneven among the main crops.
In the wheat market, a constant number of active buyers was observed, which are mainly bet on the segments of the next commercial cycle. In itself, the open purchase offers for merchandise with immediate delivery were around USD 240 / t yesterday. Regarding deferred positions, higher offers were registered at the beginning of the week. Although on Wednesday there were important cuts in the offers, the values improved in the course of the last business rounds.
On the other hand, and before the formal start of the campaign in December, according to data from the Argentinian Ministry of Agriculture, Livestock and Fisheries (MAGyP), the threshing of the 21/22 cereal has already begun, with an advance of 10 % of the total area as of November 4 versus 5% of the 2020/21 campaign on the same date.
According to official information from the Ministry of Agriculture, Livestock, and Fisheries, the stock as of November 1 in storage plants, industries, and export is 3.3 Mil MT, the highest volume for this time of the year since 2015. In this sense, this level of stocks could lessen the impact of lower yields of cereal from northern Argentina, given a not very favorable situation in the state of crops.
In line with the high supplies of wheat and in reference to the commercialization of the grain, the delivery of merchandise for 2.1 Mil MT in November has already been agreed upon. If we take into account the year-on-year comparison, as of the same date, this tonnage is a historical maximum. In turn, 1.3 Mil MT would be destined for the greater metropolitan area of Rosario city, that is, 66% of the total negotiated following the delivery date.
On the maize side, the dynamics were similar to that of wheat in terms of the number of participants and purchase values. At the beginning of the current week, there were better offers compared to the end of the previous week, reaching up to USD 198 / t for cereal with unloading in March, an increase of more than 4% (USD 8 / t) to the value offered on October 25. However, prices tended to fall over the days, both for the merchandise of the current season and the next.
Regarding the soy market, the industrial/export sector continues to be concentrated in the short delivery segments, with offers for the next crop oilseed remaining absent. The best open offers of the week were registered on November 2nd, with values of USD 353 / t for merchandise with immediate, contractual delivery and fixations. However, these values, as in the case of maize, failed to hold and suffered significant cuts, following the trend of international markets. In turn, it is important to mention that the planting of SB 2021/22 has already begun with an advance of 10% over the total estimated area, according to MAGyP, compared to the 7% registered for the previous season at the same time of year.
Finally, the sunflower experienced a considerable decrease in its purchase values. There was a drop of USD 30 in the open offer for the merchandise available as well as with delivery between December and March. The price estimated by the Cereal Arbitration Chamber on Thursday was USD 474 / t, registering a fall of close to 2% compared to the same day of the previous week.
The Chicago market was marked by a downtrend
Going on to comment on what happened in the reference market in the United States, the prices of the main crops began the week with increases compared to the end of the previous one, although then they headed down a downward path.
On Thursday, the SB contract expiring in November was adjusted by USD 444.33, a weekly variation of -2%. Wheat futures closed at USD 284.31, USD 8 lower than on Monday, and maize closed the session at USD 220.17.
The fundamentals on the wheat side correspond to the profit-taking by investment funds, after prices reached their highest values since 2012. In any case, concerns remain about the shortage of supplies in the face of solid demand overall of the cereal, limiting the falls.
About coarse grains, the harvest of both SB and maize in the United States is progressing slowly as a result of the rains that occurred in the North American Midwest, complicating harvesting tasks. Although progress is less than at this point in the previous year, it is above the average for the last five years. Despite the delay in the harvest, large production volumes are expected for both maize and SB. According to USDA data, a production record for the US bean is projected, which would contribute to the increase in the final stocks of the oilseed. Lastly, in the case of maize, the highest production volume of the last five commercial seasons is estimated.
Source: https://bcr.com.ar/
Photo: REUTERS/Stringer
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