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
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.