Severe weather in Argentina caused movement on the soy market last trading session. Hail and heavy showers have wreaked havoc on soy fields in parts of the country. The wheat market took a step back, partly due to a tender from Egypt. According to analysts, the large number of registrations is a sign that there is still plenty of wheat available.
The May wheat contract on the Matif closed €1,25 lower yesterday at €199 per tonne. Wheat also took a step back on the CBoT. The May contract traded 1,4% lower at $5.45 per bushel. Corn moved sideways to close 0,1% lower at $4.39 per bushel. Soy was on the rise last trading session, up 2% to $12.09½ per bushel.
There is no shortage of wheat. That is the conclusion drawn after the conclusion of a tender from the Egyptian state buyer Gasc. Reportedly, the best bid came from Romania at $232,50 per tonne Fob (delivered on ship). Russian exporters set a price of $235 per tonne. In total there were more than thirty tenderers for the Egyptian tender. From the large number of suppliers, analysts conclude that there is still sufficient wheat available from the Black Sea region.
Russia announced that it would revise the export tax on wheat. That is not quite what Russian farmers hoped for. They complain that the levy is far too high and is based on much lower wheat prices. Russian growers would have liked to see the export tax removed completely.
Severe weather
Soya received support yesterday from heavy showers in South America. Especially in Argentina, the wet month of March so far is causing damage to soy and corn, according to local sources. The southern part of Brazil is also affected by this. More than 100 millimeters fell around the Argentine capital Buenos Aires from Tuesday to Wednesday local time, causing flooding. It was not only rain that fell but also hail. Locally, plots of soy and corn have been completely 'chopped off' according to sources.
“There are areas where more than 300 millimeters fell in March, and we see soy fields that are flooded,” the Rosario grain exchange said in an update. The stock exchange expected an Argentine soy harvest of 50 million tons and a harvest of 57 million tons of corn. Due to the severe weather in recent days, these figures could be lower according to the Rosario stock exchange.
Soy in the interest of American arable farmers
In the US, arable farmers appear to prefer soy over corn for the coming harvest. Market agency LSEG Commodity Research expects that the soy area in the US will be 4,1% larger this crop year compared to last season. The area of corn is 1% smaller according to the agency. The USDA's acreage forecast report will be released next week. That will likely provide more direction to the market than other agencies' forecasts.
The demand for soy on the North American market is relatively good according to various experts. Processors usually plan maintenance in April, at the same time as the period when arable farmers are busy with spring work. Because arable farmers have enough during that period, they are generally not interested in extra work such as delivering soy. That is why processors are now trying to build up some extra stock to ensure they have sufficient stock until the planned stops.