Wheat worsens in Argentina and Russia threatens: Price soars?

In turn, Argentina launched an “orange alert” over its wheat production areas due to total drought: the lack of water is already affecting all productive areas in the country: “The maps prepared by the Agricultural Risk Office (ORA) show a a kind of orange alert, about the water content in the first meter of soil, through which Argentine agricultural production passes, in the context of a rainfall deficit that does not decrease”, says the expert.

According to Pacheco, the La Niña climate phenomenon threatens to bring down the wheat harvest and also forcefully reduce the planting of early corn, while soybeans and late corn are waiting. In the latest map, corresponding to October 10, all wheat producing areas in the country appear on “orange alert”, with the exception of a small number of hectares in Entre Ríos and some others in Buenos Aires, where the condition is still scarce reserves .

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The Buenos Aires Cereals Exchange (BCBA) announced that the portion of the harvest in good or excellent condition fell from 14% to 9% during the week. Another 53% were in fair/poor condition, compared to 46% the previous week. The expectation is for wheat production of 16.5 million tons, a decrease of 5.7% compared to the previous estimate and 26.3% compared to the 22.4 million tons of the 2021/22 season. It is also lower than the USDA (United States Department of Agriculture) estimate of 17.5 million tons.

According to AgResource Brasil Consulting, Russia proposes easing sanctions in exchange for an extension of the Black Sea grain export corridor. “For now, the corridor is operational and exports of Russian wheat and Ukrainian corn have accelerated”, highlights AgResource, stating that it maintains a “neutral outlook in relation to the price of 9.20 dollars per bushel in Chicago wheat and 10 dollars in KC wheat (from Kansas).”

“To drive Chicago December contract prices above $10 a bushel, there needs to be fear about a complete closure of the Black Sea. Russian-Ukrainian peace is needed to retest 7.50 dollars. Sales will be made on a large scale in rallies amid political uncertainty”, conclude analysts from the branch of the North American company AgResource Company.

By: Leonardo Gottems | agrolink