Earnings were related to “The new Chinese purchases of US grain, when the usual for the time of year would be to see demand concentrated on Brazilian soybeans”indicated the Granar grain broker.
Furthermore, it adds the strong demand that exists in the soybean oil market and the optimism about the demand for oilseed exports in the United States, according to analysts.
in tune, corn increased by US$4.7 and stood at US$21.15 per tonas a result of “dry weather forecasts for central and northwestern Brazil beginning to worry operators about the possible damage that such conditions could cause to the second harvest in the world’s second-largest supplier.”
As opposed, Wheat fell US$4 and stood at US$399.8 per ton. “The Russian government’s announcement that it has delivered a new peace agreement proposal to the Ukrainian government prompted investment funds to execute sales and withdraw profits,” Granar noted.
prices in april
The international prices of grains continued so far in April with the upward trendIt was unleashed by Russia’s invasion of Ukraine and later by production problems in the US and the certain prospect of a sharp decline for the coming campaign in the Black Sea area.
“U.S. soybean export prices are competitive with Brazilian supplies for May and cheaper than Brazil for June, July and August,” Arlan Suderman, chief commodity economist at StoneX, wrote in a note to clients.
The analysis and consulting manager of FyO, Dante Romano, explained that the grain market is currently looking at three fundamental questions: the drought in South America and its effects on a harvest that is still going on; the war in Eastern Europe; and uncertainty regarding North American production.
In the case of the lack of rains that afflicted Argentina, Brazil and Paraguay -which impacted the production of soybeans and corn with cuts that are still ongoing-, Romano said that “those losses have already been discounted by the market.”
The issue now focuses on the war between Russia and Ukraine, which is one of the main factors that continues to impress strong volatility in the grain marketsince in the latter country “it is impossible to ship 15 million tons of corn, a lot of wheat and sunflower oil.”
“There the question is whether once the conflict is over, said merchandise will be able to be shipped quickly or not. Another point of doubt lies in the fact that at this time corn and sunflower and spring wheat should be planted, and there are estimates that speak of a drop of up to 50% in productionin addition to the lack of supplies, labor and that there are occupied territories,” warned the specialist.
Finally, the third component that guides prices “It is the soybean and corn campaign that is beginning in the United States, as well as that of winter wheat”.
In the case of the latter, there are batches that present the “worst quality of the last 26 years”while for the sowing of coarse grains “a larger soybean area is expected to the detriment of corn, due to the rise in the price of fertilizers.”
With a more focused vision, the head of the Market Analysis Department of the Grassi brokerage, Ariel Tejera, focused his attention on the Russian-Ukrainian conflict.
“When analyzing the war, multiple edges and impacts on the markets can be highlighted. To begin with, in the short term, it generated interruptions in shipments and in the availability of merchandise, negatively affecting supply. Meanwhile, towards the medium term, an effect on planting decisions in Ukraine is discountedwith a decrease in area that could reach 40%,” Tejera pointed out.
“Given the extension in time, a share of uncertainty is added to the markets, regarding the outcome and when the scenario in the Black Sea region will normalize. The end is still open,” he added.
For his part, the market analyst Carlos Etchepare considered that “the market will continue to be very volatile”due to the combination of the effects of the pandemic with that of the war.
“This combination has really reinvigorated the value of food as a strategic issue and that has made the world is supplied with food from a change of policies in those most protectionist countriess, like the United States or the European Union, anticipating that they cannot lack food,” he said.
“In this context, prices will remain firm. However, this does not mean that they will continue to rise. The current prices are already very good and what you have to think about is that the demand has a limit of payment capacity. Perhaps we are already close” to the end of the uptrend, Etchepare concluded.
Source: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
