Amid global tension and drought in Argentina and Brazil, soybeans exceeded USD 600 per ton


The international price of soybeans rose again (REUTERS / Bryan Woolston)

The international price of soybeans showed significant increases again in the reference market in Chicago, and reached its highest level in more than a week, as a result of continued concerns about the dry weather in the production areas of Brazil and Argentina.

The oilseed contract that expires next March rose USD 12.31 and the ton was quoted at USD 600.76. Meanwhile, the Argentine producer, due to the withholdings and the exchange rate split, receives a price well below the one presented today by Chicago.

On the cereal side, corn whose contract expires in March this year rose USD 8 and was quoted at USD 275.64 a ton. And wheat registered strong increases in its positions for next March: USD 18 arroba and a price of USD 310.21 per ton. The explanation of the specialists to these rises is that in the market there are certain fears of a possible interruption of trade in the Black Sea region, as the crisis between Russia and Ukraine deepens.

The international grain market is closely following the conflict. The two countries account for around 29% of world wheat exports, 19% of world corn supply, and 80% of world sunflower oil exports. That is why traders fear that any military engagement could affect the movement of crops and trigger a massive scramble by importers to substitute supplies from the Black Sea region.

Lots affected by drought.
Lots affected by drought.

In addition, world food prices are already hovering around 10-year highs, driven by strong demand for wheat and dairy products, the UN food agency said late last year. The rebound in crude oil prices, with the increasing use of agricultural products for the manufacture of alternative fuels, provides additional support for agricultural markets.

Drought

The price of soybeans, the most important crop for Argentine agribusiness due to the income it generates through exports, has been pressured up for some time by climate problems that affect Argentina and Brazil, two of the main world producers. , with strong droughts that led the different private entities to make cuts in production estimates.

In the soybean plots located in the core zone of our country (south of Santa Fe, north of Buenos Aires, and center and east of Córdoba), the drought caused significant cuts in yields in the soybean fields, and they could be located below of the last drought that was recorded in the 2017/2018 campaign. This was reflected in the latest report of the Strategic Guide of the Rosario Stock Exchange, which periodically monitors in detail the situation of the agricultural campaign in the productive heart of Argentina.

According to the survey of the Rosario Stock Exchange, as of February 11 of last year it was projected that soybeans would reach a yield of 38.5 quintals per hectare in the core region, but the end of the mentioned month was dry and registered a drop of 7.4 quintals per hectare. Currently the estimates are around 31.8 quintals per hectare, but the entity’s specialists pointed out that this number was not adjusted in the last 7 days, waiting for the rains to stop the decline, something that has not been done so far. has happenedbeyond some uneven precipitation and less important than expected in the west and east of the region.

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