Inside: Grains & Raw Material
Week 19: extreme weather affects grain prices
Heavy rain in Argentina causes harvesters to get stuck in the mud. This means that the final soybean and corn harvest will be further disappointing. There is also uncertainty about the conditions of the grains in the Black Sea region.
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Choose the subscription that suits youIt will become clear in the near future to what extent the dryness in these regions actually affects the expected yields. Analysts say the drought is leading to thinner and more uneven crop emergence, especially summer grains.
The revival of the grain prices showed a high of €171,75 per tonne on the Matif (Paris) for wheat and on the CBoT (Chicago) wheat traded at $200 per tonne. Russia has her wheat stock this season, partly due to the good exports, has seen a significant decline. This also had to do with the low value of the ruble compared to the dollar and transport subsidies. This offers opportunities for other grain exporting countries, which could cause prices to rise.
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The wheat quotation on the Matif in Paris rose to a high last week.
Floods in Argentina
Not only the jamming of harvesting machines, but also flooding is considered a reason for a possible disappointing harvest in Argentina. The rain may cause the soy harvest in Argentina to be lower by more than 1 million tons. The harvest was already lower due to earlier harvests extreme drought.
It is striking, because soy from the country is now in extra demand. This is because China has little or no less, soybeans imports from the United States (US) due to the trade war. It also led to historically high soy prices in Brazil. The trade war must be contained through talks between the US and China. However, because these talks were disappointing, the price fell sharply last week.
trade war
The situation around the trade war is tense. For example, China will provide extra subsidies for soybean cultivation and fewer subsidies for corn cultivation. This is to persuade growers to grow soybeans. This shows that the country does not have high expectations for the talks with the US.
The sowing of soybeans in the US is also a cause for concern, as this has been greatly delayed in various states. In addition to the threat of the trade war, the drop in soybean meal prices caused soybean prices to drop.
Stopped corn harvest
The corn harvest in the country has also come to a halt. The rain does mean that several analysts have positive expectations for the wheat, which should be sown in 1 month.