La Nación (Argentina): Russia reported record planting acreage of wheat, the price of U.S. corn fell

Today the price of American wheat fell 2.2% after the Ministry of agriculture of Russia, a world leader in the supply of wheat, reported an increase in the acreage of winter wheat from 28.8 to 29.4 million hectares.

Chicago and Kansas stock exchange recorded a drop in the price per ton of wheat: in September, a ton of wheat on Chicago stock exchange was 193,91 the dollar and on the Kansas exchange 161,49 dollars. Now, these rates dropped to 4.32 and 3.67 dollars respectively.

But the increase cultivated area to record was not the only bad news from the Russian colleagues: with the increase in the area sown increased the yield. For this reason, consulting company “IKAR” has changed the forecast of volume of Russian production 2020/2021 with 76,50 to 78 million tons, which is still below 79,7 million, has long predicted the company “SovEcon”, which focused on the cultivation area of 29.3 million hectares.

It should be recalled that in its monthly report on agricultural estimates, published July 10, the Ministry of agriculture of the USA has updated the forecast of the crop of Russian wheat from 77 to 76.5 million tons. The market expects the Ministry of agriculture of Russia will increase the projected volume of harvest by 2 million tons, which at today’s laziness is 75 million tons.

Lower prices for American wheat could be much more significant without a devaluation of the dollar against the Euro, which lasts for three weeks, allowing the European currency reached its highest level for the first time since the end of 2018. Today, the American currency depreciated by 0.7%, while the price of one Euro fell from 1,1645 to 1,1726 dollar.

The weak dollar makes exports of U.S. raw materials, in particular wheat more competitive compared to the European Union, which, according to the Ministry of agriculture of the United States in season 2020/2021 will export about 27 million tons of grain.

Today after the close of markets the Ministry of agriculture of the USA declared about the growth of the winter wheat crop in the U.S. (it accounts for about 70% of the total supply of cereal) 81% of the acreage, which is 73 percent above the same period last year. In addition, the Agency indicated that at the beginning of the harvest of spring wheat was harvested 1% of the grain that increased the share of crops in good/ excellent condition with a 68 to 70%.

Local market

In the domestic market of Argentina, wheat prices were mostly stable, especially in the most relevant segment of the new harvest. In the area of Gran Rosario, the price of exported grain amounted to $ 170 per ton in December/ November and 172 dollars per ton in January.

In Bahia Blanca and Necochea, the price of wheat in December/ January remained at the level of 175 and $ 170 per ton, respectively.

With regard to the available wheat market, in which exporters make specific purchases only to meet the shortage of wheat for the fulfillment of obligations under contracts of delivery (most often due to low quality raw materials), the supply remained at the level of $ 195 for Bahia Blanca, and $ 180 for Necochea, whereas for Gran Rosario price per ton of wheat fell from 190 to 185 dollars.

According Matba Rofex stable quote of the September and the December contracts for wheat amounted to 197 and 173 dollars per ton. In January their quotation lost 0.9 per dollar and ended the round with a price estimated at 174.1 of the dollar.

The price of U.S. soybean and corn growing

After the close of markets the Ministry of agriculture of the USA have demonstrated significant improvement of soybeans and corn, despite the lack of positive forecasts.

As for soybeans, the Ministry contributed to the increase in the share of agricultural crops in good/ excellent condition from 69% to 72%, which had left 54%.

As for corn, the number of plants in good/ excellent condition increased from 69% to 72%, which is in 2019 was 58%.

The unexpected improvement in the condition of the plants and the likelihood that in the coming two weeks planted in the territories of the rains, tomorrow the price of soybean and corn, in the absence of sales to China, will fall on the Chicago stock exchange.

Today, the August price of soybeans in the U.S. market increased from 332,44 to 333,08 dollars per ton, while the September price of corn fell to 128,44 of 127.95 dollars.