Grain prices recorded a general decline on Friday in the Chicago marketwhich led to the soy and to corn at minimum prices of two and three years ago respectively, after the publication of the world supply and demand report of the United States Department of Agriculture (USDA).
The USDA reported that stocks of corn of the country increased to their highest levels since 2018. While the value of the soy fell after traders rushed to unload their positions after the government reported larger than expected Brazilian crops, as well as higher yield and production levels in the United States for the newly harvested crop.
The global supply of cereals is becoming more abundant following shortages caused by the war in ukraineone of the main producers of corn and wheat, and unfavorable weather conditions.
In the United States, a record 2023 corn crop and lackluster export sales have contributed to rising inventories and pushed seven corn futures contracts to new lows, including the most active ones in March, May and September. The wheat futures They also fell, weighed down by those of corn and soybeans.
“The conclusion is very simple: Right now we are producing more than our demand, and that is putting pressure on the entire market,” said Karl Setzer, partner at Consus Ag Consulting to Reuters.
The contract of corn most active on the Chicago Stock Exchange (CBOT) was down 2.62% at $4.4575 a bushel at 1806 GMT. The contract of soy The most active wheat lost 2% to $12.1175 a bushel, while wheat lost 1.16% to $5.9675 a bushel.
On the other hand, the USDA estimated the production of soy of Brazil at 157 million metric tons, 3 million less than last year’s record harvest of 160 million tons. Although widespread drought has harmed farms in some areas of that country, the world’s largest exporter of soybeans, the report placed the figure above market expectations.
“Going forward, we’re working with pretty heavy balance sheets, not just for corn, but also for soybeans,” said Terry Reilly, agricultural strategist at Marex Capital. “That’s going to set the tone for lower prices in 2024 relative to 2023.”
What happened to soybeans and corn in Uruguay?
In line with international markets, grains traded lower in Uruguay, which has just left behind the worst drought in the last hundred years. Soybeans closed the week at $390 per ton, while corn closed at around $160. Wheat, which achieved record yields, also sold at $160.
wheat production in Uruguay marked a historic milestone in the last harvest, reaching a yield of 5,037 kilos per hectare, the highest recorded so far. The data comes from the latest report corresponding to the Spring Survey carried out by the Statistics Directorate of the Ministry of Livestock, Agriculture and Fisheries (DIEA-MGAP). A very high yield of the barley crop was also recorded, which was very close to the historical record, reaching 4,789 kilos per hectare.
The report highlights a further increase in the projected area of cornwhich would exceed 213,000 hectares, which represents the largest area for this crop since the 1970s. In the case of the soyestimates that the area will be located at 1,065,000 hectares, a surface area slightly larger than that registered the previous year.
Source: Ambito
