Marketing of the 2023/24 wheat campaign is slow. Exports during the first half of the year accounted for 78% of the projected total, but is behind the historical average, according to a report from the Stock Exchange.
In this way, the dollars for this cereal are cut for the Government. In addition, in the domestic market, the commercialization of new wheat continues to be delayed, with a slowdown in weekly sales. As for the liquidationit is projected that an additional US$459 million will be accumulated during the remainder of the campaign.
So far this year, 6.1 million tons of wheat have been exported. In this sense, the 2023/24 Wheat Foreign Sales Declarations (DJVE) amount to 1.8 million tons.
The BCR also commented that it must be considered that, of the 8.9 million tons declared in the previous campaign, 5.9 million tons had to be covered with merchandise from the current harvest. “In this way, taking into account the export roll and the DJVE of this campaign, The total amount of merchandise declared for export amounts to 7.7 million tons, behind the 11 million tons recorded on average in the last five years for this date,” reported the Rosario entity.
The pace of foreign sales is relatively slower if one takes into account that the average for the last five years was 83% at this date.
Wheat exports: how many dollars entered the BCRA’s coffers
Until now, It is estimated that US$1.984 million were received for wheat exports from December 2023 to June 2024. In total, Foreign currency income from cereal exports would amount to US$2.442 billion for the entire 2023/24 cycle, a year-on-year increase of 130%. “The increase in export volume, however, would be 150%, which shows the drop in prices compared to the previous year,” said the BCR.
The Rosario entity explained that the Foreign sales dynamics are slower than usualand is consistent with a slower pace of domestic marketing. “According to official data, wheat purchases for 2023/24 by exporters to date total 7.7 million tons, 53% of the estimated harvest. If the average of the last five years for this time of year is considered, export sales in absolute terms amount to 12.5 million tons, and represent 68% of production”the report says.
Falling prices impact wheat clearance
The drop in prices does not encourage sales. “International prices are under pressure due to the current wheat harvest in the northern hemisphere, impacting price formation in the local market. In Chicago, the largest volume contract traded ended this Thursday at US$196.5/t, marking a 6% interweekly drop,” the BCR stated.
At the same time, the Government’s measure on the cash settlement caused the export dollar to fall at which exporters settle. Nor does it contribute to negotiating better prices in pesos at the local level.
This campaign, meanwhile, took place within the framework of a historic production for Brazil. The neighboring country will achieve the second largest wheat harvest on record.
“Wheat planting nationwide has already reached 92% of the estimated planting area, while in the state of Rio Grande do Sul the progress is 88%, showing a slight delay of 3 percentage points compared to the average of the last three years. As Brazil emerges as the main export destination for Argentine wheatThe key question is how much this climatic event will impact its production, and if this opens the possibility of greater demand for our country,” said the BCR.
Source: Ambito
