So far this season, the entry of trucks with wheat to Gran Rosario fell by 80%
Between 1-26/DEC, 485,000 MT of wheat were discharged at Upriver ports, 80% below last year, and the lowest level recorded since 2013. The supply shortage supports prices, and the US takes advantage of the situation to increase area.
The historic drought that hit Argentina has already begun to show in trade logistics. Starting chronologically with wheat, whose 2022/23 campaign officially began on December 1st, we can see a sharp decline in truck traffic for discharging wheat. Based on information from CECOA and own estimates, up to January 26th, a total of 484,440 MT were delivered to Rosario terminals by truck—83% below the last five-year average, and aside from being the lowest volume since 2013, it’s the second lowest since records began in 2001.
As a consequence of the supply shortage, the evolution of quotations reported by the Rosario Grain Arbitration Chamber—measured in dollars and converted at the Banco Nacion’s official exchange rate—continue to remain above quotes recorded at the same period in the previous five seasons.
On another note, regarding the wheat situation, last week came in the latest official data on milling of bread wheat for December 2022, reported by the Secretariat of Agriculture and Livestock of the Nation (SAGyP). It totaled 443,366 MT in the first month of the 2022/23 campaign, with the province of Buenos Aires accounting for 49% of the total processed, contributing 226,450 MT, followed by Cordoba with 23% (101,748 MT) and in third place Santa Fe with 13% (58,050 MT). The balance came from Entre Ríos (13,893 MT), other provinces (39,107) and the City of Buenos Aires (4,118).
Looking at the data from December 2022, we see that the 447K MT of wheat milled this new cycle are behind the 453K MT of December 2021 but still ahead of the 399K MT of December 2020, and even the 434K MT average of the last five years, although the use of feed-wheat has suffered relatively more than the use of milling-wheat.
In the international arena, the news that made noise in the markets came from North America. The USDA’s latest quarterly grain estimate reported this month that wheat acres actually planted in US have increased from those previously estimated. On top of this, the reported planted area is even higher than market expectations (14.64 M ha).
Winter wheat planted acres were up 11% from 2022, consolidating the largest planted volume for the US grain since at least 2015. The area planted with winter wheat for 2022/23 is expected to reach 15 million Ha, of which 10.2 Mil Ha are Hard Winter Wheat (HRW), 3.2 Mil Ha are Soft Red Winter Wheat (SRW), and 1.5 Mil Ha are White Wheat.
To all this, we also consider the interesting volumes of wheat export from the United States in recent weeks, along with cuts in production estimates for Ukrainian wheat. Against this backdrop, the nearest soft wheat futures in Chicago closed last Thursday near 276 UDS/MT, 2% above last week. Likewise, durum wheat ended Thursday at 317 USD/MT, up almost 4% this week.
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