In the context of an international climate crisis, domestic wheat prices have rebounded. Wheat futures prices for harvest months remain around USD 174-176/ton while forward contracts for short delivery in January have touched USD 180/ton.
This week, the local wheat market focused on the spot segment, with deals that climbed to AR$ 2,900 for cereal to be delivered in September, while cash bids stood firm at AR$ 2,800 per ton. Exporters have played a crucial role, purchasing 2.5 million tons for the next marketing year, whereas by the same time last year they had bought a mere 121.000 tons.
If we look at global wheat market, the competitiveness of Black Sea region’s wheat (Rostov) stands out. Priced at USD 188 /ton; it managed to attracted requests from Egypt. FOB prices for Argentine wheat stands around USD 198/ton, above that of French Wheat (USD 193.8/ton for Rouen ports), but below that for US wheat, with FOB prices for SRW and HRW from Gulf of Mexico at USD 201.6 per ton and USD 243.5 per ton respectively
In Argentinian fields, about 150 thousand hectares will not be planted with wheat due water excesses. On the other hand, frost has hit wheat plots throughout the center of the country, causing damages to the foliar tissues.
The escalation of spot corn bids
In the domestic cash market, corn bids started the week at AR$ 2.250/ton and rose to AR$ 2,450 /ton; value that seduced sellers to sell their grain. The exporting sector has already bought 16.3 million tons, which represent the 43% of estimated total production (38 million tons) compared to 12.8 million tons acquired last year at the same date.
Forward prices for the next harvest to take place between March and May 2018 fluctuate between USD 150 and 155 per ton. However, sellers tried to force buyers’ hand into offering for USD 160/ton. Likewise, corn for June/July'18 delivery, much sought after by the exporters, presented a weekly jump of USD 5-10 to reach USD 150-155/t
Meanwhile, corn harvest tasks were triggered by drier and colder climate. Farmers are looking to obtain grains with humidity levels below 14.5% in order to avoid drying costs and/or rejections in ports, although this is not always possible. Harvesting machines already covered 77% of total area, surpassing the figure corresponding to the same time of last year by 16 percentage points according to Ministry of Agroindustry data.