In the global market, abundant
supply is offset with the positive signs on the demand side, leaving the prices
relatively unchanged during the week. Without any external signals of
significance, the local market did not show big changes in prices and the
activity was concentrated in contracts with near delivery.
After a delayed start of the corn harvest in United States in 2017,
forecasts for dry weather over the next week in the Midwest, main grain
producer area, enable to revive the optimism for the crop progress.
As the first graphic shows, until last week the only 28% of the projected
area had been harvested, quite behind the 46% of the last campaign as well
as the 52% average of the last five years.
The bearish pressure from the US harvest are offset by the strong external
demand for grain, after USDA reported weekly exports for 1.3 million tons,
far above market expectations of about 800 thousand to 1.1 million tons.
Thus, on Thursday corn futures in the Chicago Market closed without change
regarding the previous week to USD 137.3 per ton.
In the Rosario spot market, cash bids for corn remained relatively
unchanged during the week, with buyers offering ARS 2,350 per ton. Bids for
new crop corn for April delivery started at around USD 143 per ton for
delivery in April, with a USD 2 per ton premium for march delivery. Buyers
of late new crop corn, with deliveries from July to September, were looking
to pay up to USD 142 per ton.
Signs of weakness in corn bids disappeared once fears of a strong rain
system in our zone appeared. According to GEA, about 100,000 hectares that
were going to be planted with corn will move to soybeans.
The global corn market is currently feeling pressure from expectations of a
large Brazilian crop. Just this week, USDA increased the estimate for the
Brazilian corn crop 2016/17 to 97.7 million ton due to better yields. This
would mean a 46% increase in supply from Brazil.
No fundamental news for wheat, Argentina is focus in the next crop
Wheat for nearest delivery in CBOT closed at USD 157.6 per ton, a 1%
increase over the past week. USDA reported total weekly exports of 615,400
tons, surpassing market estimates of between 250,000 and 450,000 tons.
In the local market, cash wheat bids fell to ARS 2,850 per ton, ARS 50
below previous week levels. This drop resulted in slower trading activity.
New crop wheat bids reached USD 165 per ton for delivery between November
and January, whereas buyers offered USD 170 for wheat to be delivered
between February and March. Export commitments stand at 11.5 Mt for the
current crop cycle and 1.2 million for the next year.
The grain remains in a critical stage of its development in the core area
of the country, with 70% filling grains and 15% flowering according to GEA.
In certain locations of Santa Fe, signs of fusarium were seen, and in
Buenos Aires there are alerts of Puccinia Graminis
Wheat and wheat flour exports might increase in the following marketing
year given downward adjustments to Brazil’s wheat crop, which is expected to
fall 23% due to dry conditions and cold temperatures that gave way to stunted