The price of wheat in Chicago, after stabilizing during the week, fell sharply on 05/09 (Thursday) and closed the day at US$ 4.21/bushel, against US$ 4.33 a week earlier. The market worked in anticipation of the USDA's supply and demand report, to be announced on 10/05, as well as following the progress of negotiations between the USA and China from afar, although they hardly affect it directly.
Winter wheat crops in the USA, until 05/05, showed 64% between good and excellent, 28% fair and 8% between bad and very bad. Spring wheat planting reached 22% of the expected area, against 49% in the historical average.
Net sales of American wheat, for the year 2018/19, totaled 122,100 tons in the week ended 25/04, 72% below the average of the previous four weeks. For the year 2019/20 they reached 297,400 tons. The market expected, over the two years, a total of between 250,000 and 850,000 tons. In turn, inspections reached 477,918 tons in the week ending 02/05.
As for expectations surrounding the USDA report, the market expected ending stocks in the USA, for 2018/19, to be around 29.9 million tons and for 2019/20 a volume of 29.2 million.
In Mercosur, the FOB ton for export remained between US$ 215.00 and US$ 220.00, while the new Argentine harvest was at US$ 180.00, both during purchase.
And in Brazil, there were also few changes in the wheat market. The Rio Grande do Sul counter closed the week at an average of R$ 41.32/bag, while lots remained at R$ 48.00/bag. In Paraná and Santa Catarina, the average counter and lot values remained at the same levels as the previous week.
In fact, the market for national products is practically at a standstill, as there is no higher quality product available. Now, the expectation is for the planting, which is developing. In general, a repetition of the area sown last year is expected, that is, something around 2 million hectares.
In Paraná, according to Deral, wheat sowing reached 26% of the area expected until 05/05, against the average of 30% in recent years for this season. For now, 97% of the sown crops present positive conditions. In Rio Grande do Sul, planting is just beginning, with no statistical highlights for now.
As for sales, the market is expected to remain slow until the start of the new harvest. The price guide will continue to be the imported product, from which local mills are supplied. This import, if the devaluation of the Real continues, tends to become more expensive, potentially increasing the price of the national product. However, everything will depend on the size and quality of the new Brazilian wheat harvest, which begins in Paraná, in September.
In normal weather, a volume of 6.6 million tons is expected, that is, 27% above that harvested in last year's relatively unsuccessful harvest. If such volume is confirmed, cereal prices should fall in the country. Furthermore, one should be alert to the fact that, as the Pension Reform advances, the exchange rate tends to return to levels of R$ 3.70 per dollar, favoring imports.
