The influx of wheat trucks in November is already the second-highest in history
Nearing the 2021/22 campaign, the discharge of trucks in the greater metropolitan area of Rosario city is strongly accelerating. Prices and foreign markets on the rise. Good forecast for barley campaign as well.
As November comes to an end, the arrival of trucks to discharge wheat continues its steady pace, arriving at ports throughout the country. So far this month, more than a million tons of wheat have already passed through terminals, making it the second-highest value in history for this month of the year.
In this context, exports continue to accumulate for the campaign that officially begins next week. The 2021/22 campaign registers business abroad for 9.08 Mil MT as of November 25, slightly above the historical 2019/20, which accumulated at this point 9.05 Mil MT.
Meanwhile, the wheat harvest has been showing good yields while exceeding the previous season. With 32% of the area already harvested as of 11/25, the wheat harvest is at 5% above the previous campaign. Progress is higher not only in relative terms but in absolute terms as well, since the covered area reaches 6.84 million hectares, up from 6.73 Mil Ha in the 2020/21 season.
Closing in on a new wheat campaign, between the second half of November and the first half of December shipments of 0.53 Mil MT of wheat are expected, with 85% of the total shipping from Upriver ports. Supporting the good omens for the Argentine wheat trade, we can see that this value is comfortably above the 0.42 Mil MT, the average of the last four years for this same period.
Prices and foreign markets on the rise
In the Chicago market, the net buying position of wheat jumped again, climbing almost 1.5 Mil MT this week, thus nearing 2 Mil MT. It consolidates its third consecutive week in a net buying position, a string that has not been seen since August. Thus, the positions taken by the funds continue to support the propping-up of prices of the cereal.
In this framework, this week found external wheat prices reaching nine-year highs. A series of external factors support these prices as supply limitations are expected in a context of high demand. On the one hand, the condition of US winter wheat crops unexpectedly worsened, showing signs of a potential drop in yields around the end of wheat planting.
In addition, while Australian wheat production has improved substantially, projections increasingly cut the Australian wheat estimates. After the largest harvest in history in the 2020/21 commercial year, the 2021/22 season, which began in October this year, aimed to exceed 33 Mil MT, according to forecasts by the IGC and the USDA. However, these forecasts today place it between 31-32 Mil MT. In spite of heavy rains in recent days that aim to improve production, excess water would reduce the quality of the cereal.
Furthermore, Russia’s wheat exports have been falling steadily. While the uncertainty about the implementation of wheat export quotas persists, Russian wheat foreign trade shows a decrease of 21.6% in the 2021/22 commercial year that started in July of this year, with about 15 Mil MT exported so far, and a prediction of 36 Mil MT total exports, according to the USDA.
The slight price declines in Chicago observed on Wednesday is attributed to pre-Thanksgiving profit-taking in the United States, which found the market empty of operations on Thursday. Even so, wheat traded during the week with net increases of 2% at the end of Wednesday, with prices around 309 USD/MT for nearest positions.
In the local market, wheat with available delivery found open offers for 230 USD/MT on Wednesday, an improvement of 5 USD/MT compared to Monday’s levels. Meanwhile, during the week, Matba-Rofex futures traded above 240 USD/MT for the December position.
Wheat is not alone: barley also begins its 21/22 Season
With about 1.35 million hectares planted, barley is looking to kick off the 21/22 season. Planted area increased more than 17% compared to the season that is ending for this current crop, which has its main productive area between La Pampa and Buenos Aires provinces.
MAGyP estimations expect a production close to 4.5 Mil MT for this campaign beginning next week if we consider both brewing and feed barley. This number is located below the 5.06 Mil MT mark of the 2018/19 campaign but represents a productive increase of 19% compared to the 20/21 campaign.
At the close of the 20/21 cycle, exports of feed barley slightly exceeded those of the 2016/17, thus, becoming the second-highest campaign for exports in at least five years. For their part, brewing barley export commitments are at a five-year minimum, with 0.92 Mil MT recorded in DJVE for the 2020/21 commercial year, well below the 1.32 Mil MT of the 19/20 season.
However, exports of 2021/22 feed barley already exceed the total amount declared for the entire current campaign. With more than 1.6 Mil MT declared and the season just beginning, 0.4 Mil MT is the balance volume needed to break the historical export record for the 2018/19 season.
Source: https://bcr.com.ar/
Photo: REUTERS/Stringer
For more info visit
https://www.linkedin.com/company/wbl-shipping-agency/