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 News

16/01/2018 0:00 - Agricultural Commodities Market
BLAS ROZADILLA
An expectant wheat market showed less dynamism

The week in the local market was marked by caution. A decrease in the number of active buyers in the pit, which remained expectant on the eve of a new monthly report of supply and demand of the USDA, reduced the operated volume and kept the prices stable.

In the Rosario’s Cash Grains Market, in the last week, the wheat has seen a decrease in transactions in relation to the previous week which led to maintain certain stability in their prices. A smaller number of active buyers took away dynamism from the market, despite which the reference prices established by the Board of Trade showed a slight improvement in relation to what happened before. In fact, last week this reference prices remained in a range between AR$2,990 / t and AR$3,005 / t, while last Monday reached AR$3,050 / t, and then remain above AR$3,030 / t for the rest of week.

For forward contracts traded in the local market, the operations were focused on positions with delivery for February and March, where most of the negotiations were conducted in local currency with an open value of AR$3,100 / t. Forward operations in dollars made for deliveries in the same months remained at US$163 / t and US$164 / t, respectively.

As mentioned above, a difference to be highlighted compared to last week is that the number of buyers who were active decreased. The non-traditional demand that had appeared in this market was kept on hold this week and the operations were mobilized from the purchases by the exporters. However, a general caution could be perceived within the trading floor with the operators waiting for the monthly report of supply and demand from the United States Department of Agriculture (USDA) that will be released in the afternoon of this Friday.

In the Chicago market, since last month, attention was focused on the climatic situation of the U.S. Plains, especially in Kansas, the main producer of hard winter heat. This variety is the one that most resembles local production among those grown in the northern country.

This area was haunted by extreme dry and cold climate that generated great concern due to the possibility of crops damage. In turn, the USDA is expected to cut the estimated sown area of the cereal in its report on Friday. This data has led to an increase in the price of cereal futures, the contract with expiration in March started the week with a price of US$157.17 / t on Monday to reach US$159 / t, on Thursday. However, the market has been pressured by large global stocks and a slow progress of exports because of the great competition in the foreign market.

In Argentina, the picture is different. This campaign set a record in terms of the amount of wheat shipped and scheduled to ship, accumulated until January and, in turn, the largest record in 10 years of purchases by the exporting companies for the same period of the year.

 

So far this campaign, according to data from the MinAgro (Argentina’s Ministry of Agriculture), the export sector has bought around 3.7 million tons more than the average of the last five campaigns in the same period. Another data to highlight, has to do with the almost 4.87 million tons shipped and projected to embark until January according to NABSA data, about 500 thousand tons more than last marketing year.

 

As can be seen in the chart, the month of December of the current campaign had a much greater dynamic than that observed in the same month of the previous one. The volume of shipment reported by NABSA is about 2 million tons higher in the current campaign than in the past. This was later reflected in a fall for the month of January in relation to January of last year.

Deepening the analysis, it is possible to note that for the current campaign, exporters have already committed 62.5% of the cereal they have purchased for sale abroad, as reflected in official data, being that for the last ten campaigns (on average) they had only sell 21.6% of the merchandise purchased at this time of the year. This gives the indication that the export sector is still managed with a relatively tight level of stocks of wheat for the remainder of the year and to carry to the subsequent campaigns, giving the pattern of a latent demand for the future.

 

 Institutional video


Institutional Video of the Bolsa de Comercio of Rosario (Rosario Board of Trade)

 Rosario Board of Trade

The Rosario Board of Trade is a centennial institution located in Rosario, in the most important agroindustrial zone of Argentina. Throughout its history it has created and boosted transparent, solid and reliable markets: the Grains Physical Market, the Futures Market, the Capital Market, and the Livestock Market.

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Bolsa de Comercio de Rosario Córdoba 1402 - S2000AWV
TE: (54 341) 5258300 / 4102600
Rosario - Santa Fe - Argentina

Oficina Buenos Aires Reconquista 458 piso 7° - C1003ABJ - Cdad. de Buenos Aires.
Tel: (54 - 011) 43280390/1484 43939391/9649- Fax: (54 - 011) 43939649
contacto@bcr.com.ar