Analysis Grains & Commodities
Argentine soy growers make a big splash
The grain market has all the characteristics of a weather market. However, the futures markets do not react exactly as you would expect. Despite fewer drought problems in the US, wheat took a step up. In Argentina, farmers sold a record amount of soybeans, the Rosario grain exchange reported.
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Choose the subscription that suits youNo trading on the Paris stock exchange yesterday. The Matif was closed for Labor Day. Trading was still going on in Chicago. Wheat closed slightly higher by 0,4% to $5.15¼ a bushel. Corn took a step back and closed 0,6% lower at $4.64¼ a bushel. Soybeans were in the green again with an increase of 0,5% to $10.40¼ a bushel.
The weather forecasts and the price movements on the CBoT do not entirely match. The occasional shower, but also enough dry days to keep up the pace with the sowing of corn put some pressure on corn prices. Pressure on the crude oil market does not exactly help corn either. Ethanol fired from corn for use in fuel is therefore less interesting. On the other hand, the corn stock in the US is on the tight side. According to the export data, more than 1 million tons of corn has been exported up to the end of April. Of the total amount of corn that the USDA expects to export this season, 90,7% is gone. The five-year average for exports this week is 88,3%.
Rain has also fallen on the southern prairies in the US in recent days. 23% of the area of winter wheat is in a drought area. That was 33% last week and last year this week it was 28%. Further north in the states where a lot of spring wheat is grown, some water also fell, but for example Montana and North and South Dakota still remain largely colored in the latest drought monitor. The area of spring wheat in a dry region has fallen from 49% last week to 37% this week according to the USDA.
Sales record
Argentina made a splash this week with soy sales. According to the Rosario stock exchange, 230.000 tons of soy were sold by Argentine farmers in one day. Never before has so much soy been sold in one day. According to analysts, the record sales are due to a combination of factors. On the one hand, the exchange rate is somewhat less volatile and on the other hand, growers need cash to pay for the inputs to get winter wheat back in the ground for the coming harvest. What also helps is that a drier period ensures that the soy harvest is catching up. Until now, the harvest progress has lagged behind the five-year average and that has also put a brake on the amounts of soy that growers can sell.