Cash bids for wheat in the Rosario spot grain market established a downward trend, whereas forward prices with deliveries from January onwards have somewhat recovered. Under current projections of production for the 2017/18 season, the balance of supply and demand of wheat is perceived as extremely adjusted when considering forecasts of an active external demand. Data on production problems in Brazil, the main destination of grain and flour for Argentina, as well as in Paraguay, an alternative source of part of the wheat supply for the industry in São Paulo are some of its fundamentals.
Since the second half of November, the market has begun to discount this shortage of supply that is expected for the campaign that officially begins this December 1. Despite seasonal pressure generating a decrease in prices in December / January, nervousness in the market already puts January prices above cash bids, while for July delivery merits a premium of USD 15 per ton. Note the abrupt change in trend exhibited by the MatBA wheat futures for July 2018 in mid-November, with a rise of almost $ 5 in just 15 days.
The harvest, meanwhile, has been advancing at a very fast pace in the beginning of this campaign. As reported by the Ministry of Agribusiness, 34% of the intended planted area has already been harvested, well ahead of the 26% reached at the same height of the previous year. As for the yields, these come in many cases resulting better than expected.
Meanwhile, the first quality surveys are optimistic for protein content and test weight, although the number of samples analyzed is still too small to make comprehensive statements. The results that arise from the samples admitted to the Laboratory Complex of the Rosario Stock Exchange are shown in the table below, where it can be seen that the average protein of the samples analyzed amounts to 10.6%, while the PH average 79.88.
In our area, the progress of the harvest reaches 45% according to GEA, with very good performance reports. On average, the core area reaches a productivity of 43 quintals per hectare, with some surprising lots that reach up to 75 quintals per hectare.
As we have stated previously, the commercialization shows a rapid advance in this new cycle. Exporters have already bought 5 million tons of new wheat, the largest volume in a decade, while in November shipments could reached 1.2 million tons according to preliminary data from maritime agencies. Although this data is not discriminated according to its marketing year, it can be safely assumed that a high percentage corresponds to wheat that has been recently harvested.
For the next few weeks, meanwhile, almost 800,000 tons of wheat is projected to be shipped from Argentine ports, 22% more than the same date last year. In addition, 80% of said tonnage would sail from the terminals of the Gran Rosario, conditioned by the frenetic pace of truck entry to our area that is observed in the roads.