Due to the conflict in the Black Sea area, the price of wheat increased by 2.6% in Chicago
The dialectical hostilities between the various actors in the conflict on the borders between Russia and Ukraine were today upward fuel for international wheat prices, with improvements of up to 2.6% on the Chicago Stock Exchange in anticipation of the impact that a military confrontation between two of the largest global suppliers would represent for the fine grain trade.
at the end of the wheel Chicago boards reflected increases of US$7.53 and 7.07 on the March and May positions of wheat, whose adjustments resulted in 294.13 and 295.42 dollars per ton. In Kansas, these same contracts earned US$9.09 and 8.91, while their prices remained at 300.56 and 301.48 dollars per ton.
The bullish trend for wheat was also reflected on the Euronext boards -it is the reference market for cereal in the European Union-, where the improvements for the March and May positions were 8.50 and 7.75 euros, end the day with adjustments of 281 and 278.50 euros per ton.
The United States and the rest of the members of the North Atlantic Treaty Organization (NATO) continued to warn today about the real possibility of Russia invading Ukraine and, based on this, announced the displacement of troops towards Eastern Europe and towards the Baltic Sea. While Russia denounced these actions and called them “information hysteria” to escalate tension in the region. Neither party seems willing to bet on restraint.
This framework encouraged the administrators of the large investment funds to increase the purchase of wheat contracts and to motorize the rise in prices, after last week the prices of the cereal increased by 5.2% in Chicago and 6 .5% in Kansas. With these improvements, the fine grain managed to cut the negative streak of three weeks in a row imposed by the entry of the abundant supply of wheat from the southern hemisphere.
Corn prices in Chicago also rose today and their fundamentals were largely related to the tension in the Black Sea area, because Ukraine is the world’s fourth largest supplier of the cereal and because the upward trend in wheat spreads firmness over the rest of the forage grains, including corn.
The March and May positions of corn in the US market totaled US$1.87 and 1.38, while their adjustments were 244.48 and 243.10 dollars per ton.
Corn rises were limited by the rains recorded in recent days over Argentina and by forecasts of cooler and wetter weather since Wednesday in southern Brazil. The market considers that these weather conditions could stop the deterioration of the crops, although they would hardly generate an upward correction of the harvest estimates with which they are working in both countries.
Soybeans today carried the weight of the losses in Chicago, partly due to the rains in Argentina, but also due to sales from the investment fund sector, needing to withdraw profits in an adverse session for a good part of the financial indicators of Wall Street and Europe.
The blackboards reflected reductions of US$4.14 and 4.41 on the March and May soybean contracts, whose adjustments resulted in 515.51 and 518.45 dollars per ton.
The progress of the soybean harvest in Brazil – beyond the losses caused by the weather – was also a bearish factor for prices. In this regard, the AgRural consultancy indicated that the less humid weather in Mato Grosso and the start of work in other states gave impetus to the harvest last week. “Progress has already been made on 5% of the cultivated area in Brazil, compared to 1% in the previous report and 0.7% at the same time last year,” the firm said.
He added that the yield reports “remained satisfactory in Mato Grosso, where the cases of damaged grains and with excess humidity decreased in relation to the previous week due to more spaced rains. In Paraná, work continued to be concentrated in the west and southwest, with very low yields due to the drought. Recent rains benefited crops in the rest of the state, but came too late to the west and southwest.” It should be remembered that AgRural forecasts the volume of the Brazilian soybean harvest at 133.40 million tons, far from the 145.40 million projected at the beginning of the 2021/2022 cycle.
The external increases in wheat had a partial correlation in the domestic market. Indeed, in the physical square offers from exporters remained stable at 240 dollars per ton for the Gran Rosario area, where 250 dollars per grain were proposed for deliveries deferred to February/April, while they rose from 245 to 250 dollars for the port of Bahía Blanca and from 242 to 245 dollars for Necochea.
In the Matba Rofex, the March and July wheat positions added US$3 and 4 at the end of the round with adjustments of 250 and 253 dollars per ton.
The Ministry of Agriculture of the Nation reported today that to date 13,255,038 tons are recorded in the register of Sworn Declarations of Sales Abroad. It should be noted that in its December agricultural estimates report, the agency projected the volume of exports for the 2021/2022 cycle at 14.50 million tons.
Regarding corn, the exporters raised their offers for the available grain from 245 to 250 dollars per ton for Necochea, while they kept their offers unchanged for Bahía Blanca, at 255 dollars, and for Gran Rosario, at 230 dollars.
For corn from the next harvest, for unloading between March and April, buyers improved their offers for Bahía Blanca and Necochea, from 250 to 255 and from 245 to 250 dollars per ton, respectively, while they kept them stable for the Gran Rosario area, at 225 dollars.
The Matba Rofex boards reflected increases of US$2 and 4.20 on the February and April positions of corn, which ended the day with values of 231 and 227.20 dollars per ton.
Regarding soybeans, factory offers for the grain with immediate delivery fell from 395 to 385 dollars per ton. The equivalent in local currency, of 40,167 pesos per ton, exceeded the 39,816 pesos calculated by the Rosario Stock Exchange as the theoretical payment capacity of the export oil industry. In the case of sustainable soybeans, to the $385 the interested parties added a bonus of $5 per ton.
For soybeans from the next harvest, for deliveries between April and May, the demand reduced its offers from 360 to 357 dollars per ton for the Gran Rosario; from 360 to 350 dollars for Bahía Blanca, and from 355 to 350 dollars for Necochea.
In the Matba Rofex, the February and May soybean positions fell back US$7 and 3.70, while their adjustments were 383 and 361.50 dollars per ton.