The next great milestone in the Argentine countryside will be the wheat harvest, which, although it has already started in the north with meager yields due to the lack of rain, will gain strength and preponderance as it advances towards the center and south of the agricultural area, where it is obtained. the bulk of production. Unlike previous campaigns, this cycle is projected with an increase in production, exports and both international and local prices.
According to the Rosario Stock Exchange (BCR), the harvest forecast is at 20.7 million tons, which, if materialized, would mean a production jump of 3.7 million tons, thus achieving a record cereal campaign. This increase, which the climate will play a central role to be achieved, especially in a Niña year, opens the door in an international context of high cereal prices, of achieving record exports.
The latest projections made by the Rosario stock market indicate that the possibility of exporting 13 million tons of grain (2.8 million tons more than in 2020) and about 550,000 tons of flour. That would allow, in the first case, an inflow of foreign currency for USD 3,830 million in 2022, exceeding the estimate for this year by USD 643 million. With this, wheat will not only achieve the most important growth in amount, but also have the most significant increase proportionally.
But that is not the only positive factor for the crop: despite the marked rise in costs, both in marketing and in production, it would be the only crop that would culminate the campaign with a gross result in the hands of the producer greater than that obtained in the previous cycle. In this way, the BCR calculated that the value of the cereal harvest would reach USD 5,110 million (USD 1,470 million more than in the 2020/21 campaign). If the aforementioned costs are discounted, the gross result of the productive sector would be USD 1,450 million, USD 200 million more than in the past harvest.
Regarding prices, Market specialists point out that current levels are historically high, although the rise in costs could make a dent in profitability margins. For example, in the Chicago benchmark market, the cereal ended the week at USD 281 per tonne, which despite falling five consecutive sessions, is almost USD 20 above the price registered in the middle of last month .
At the local level, the December position in the Matba Rofex (MtR) was traded at USD 246.5 per ton, a far cry from the USD 192.5 that said contract was quoted in July. For the head of the Market Analysis Department of the Grassi grain broker, Ariel tejeraThese prices at the local level represent a “market that continues to show signs of firmness” and that they “continue to generate new opportunities to close margins or average results”.
“It must be considered that it is a value that is constituting a ceiling that is difficult to overcome“Tejera remarked in dialogue with Infobae, at the same time that he stressed that” it should be borne in mind that the export has already declared about 9 million tons and closed purchases for a similar volume. This situation, atypical for this time of year, raises certain questions ”.
For the managing partner of the grain storage, logistics and conditioning company, Sojas Argentinas, Martín Gassmann, the current prices become an opportunity for the producer in terms of taking a position. “Today we are at USD 240, the January position is trading at USD 255 and March is more than interesting at USD 258 per ton. If one has the possibility of managing the merchandise, that price as of March is very good. They are prices that are historically high and very interesting ”, highlighted the market specialist.
According to Gassmann’s reading, “Today the producer is looking a lot at the Argentine situation and also what may happen with the exchange rate, but with the prices we have for March it becomes more than interesting to take a position, because, with the entry of the spring rains in the north, we do not know if the trend can be reversed and that this implies a reduction in prices. Given the opportunity, you have to act, especially with what has to do with the commitments already made ”.
Beyond this, the businessman also reviews the commercial context in which he highlighted that 45% of wheat is already compromised and that exports have recorded 9 million tons to date in Affidavits of Foreign Sales (DJVE). That is why he calculated that “with an expectation of 20 million tons, we will have to export about five million tons from now on”, although he remarked that “there will be what the authorities are going to say about what can be to do or not, since that is the uncertainty that we have, if the export will be released in an adequate way with freedom of prices or there will be a containment ”.
For his part, Tejera said that this scenario of local prices “is taking place within the framework of a very favorable international context in terms of wheat prices. For example, taking Chicago, prices are about 30% above last year’s records for this time. “
“The 2021/22 cycle would be marked by a drop in production in some of the main exporting countries, such as the United States, Canada and Russia, as well as a decrease in global final stocks,” said Tejera, at the same time as facing the In the next season, which began to be sown in the northern hemisphere, “the outlook would not be optimal: the plots are deteriorated in the United States, where only 45% were good to excellent. In a similar sense, the climatic conditions generate uncertainty in Ukraine and Russia ”.