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The Brazilian wheat market had a week marked by slow trading. The summer harvest continues to demand the attention of producers and saturates the flow logistics. Therefore, business reports are punctual and basically due from April onwards.
Indications remain close to R$ 1600.00/t in the Paraná market. In Rio Grande do Sul, the buying and selling points remain distant. For the new harvest indications from R$ 1,320.00/t. The total production cost calculated by Fecoagro in the state was around R$ 1,100.00/tonne, depending on productivity.
“Even discounting logistics expenses, the price in the interior of the state would cover the total cost of production, something that is quite rare for wheat. Planted after soybeans, the cereal shares the fixed costs of the crop with the oilseed. Thus, once operational costs are covered, wheat farming becomes attractive”, explains SAFRAS & Market analyst, Élcio Bento.
The Chicago Board of Trade (CBOT) for wheat had a negative week. Without fundamental news, the favorable climate in the producing regions of the United States and the sharp drop in oil prices on Thursday ensured the losses, even with the good result of American weekly exports.
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North American net sales of wheat, for the 2020/21 commercial season, which begins on June 1, were 390,100 tons in the week ending March 11. It represents an increase of 18% compared to the previous week and 40% over the average of the last four weeks. Highlight for the sale of 132,300 tons to China.
For the 2021/22 season, there were another 139,000 thousand tons. Analysts expected exports of between 175 thousand and 500 thousand tons, combining the two seasons.
Another factor putting pressure on external prices was the prospect of an increase in supply from Russia. Furthermore, the local government is already showing signs that it will not regulate exports during the season, relaxing the measures adopted last year. Russia is expected to produce 79.2 million tons of wheat in 2021, according to SovEcon. The volume is above the 76.2 million tons previously forecast.
By: Dylan Della Pasqua | Crops & Market
Copyright 2021 – CMA Group
