According to the analysis by TF Agroeconômica, wheat prices continue to fall mainly due to the influence of production in the Black Sea, where the countries in this region, major producers and exporters of wheat, have just harvested their crops and need to ship a large part of them in just three months. From July to November, weather conditions freeze rivers and cover railways with snow, making transportation difficult. As a result, Black Sea producers are more aggressive in the market, which complicates the reduction of stocks in the United States.
Another factor contributing to the price decline is the large US harvest, which exceeded initial forecasts. This abundance of supply in the US market puts downward pressure on prices, requiring greater demand to balance the market. In addition, the strike on the Canadian railroad, which is crucial for the flow of US wheat, unexpectedly worsened the situation.
Buying opportunities and bullish trends in the wheat market
However, TF Agroeconômica highlights that these factors are seasonal and should dissipate, which could result in higher imports from the US and, consequently, higher prices on the Chicago and Kansas Stock Exchanges. Weekly exports of US wheat exceed those of last year, indicating constant demand and an upward trend in prices.
A break in the current support offers opportunities to buy at low prices, with potential gains when wheat prices on the CBOT rise. In the flour market, there is intense competition for market share, with some companies sacrificing part of their profits to gain the preference of buyers. This trade war could ease significantly with the arrival of the new harvest, which, if of good quality and at competitive prices, could further reduce prices in the domestic market, currently between R$ 1,550/t and R$ 1,700/t CIF.
Source: Leonardo Gottems | agrolink
