Wheat milling in January was 8% higher than previous year

Wheat milling in January was 8% higher than previous year

Despite the drop in production, the pace of wheat milling remains firm, in January it grew by 8% year-on-year. Downward trends in local and international prices.

Considering the first two months of the season, this cycle begins with a steady pace of milling of bread wheat, which is projected 3.4% above the same period of the previous cycle. Although December 2022 began with levels below those of the previous season, in January the volume of bread wheat milling recorded 452,917 MT, the highest value in three seasons and the second highest value in 8 years, only surpassed by the 2019/20 cycle.

During the last week, the export sector recorded purchases of 19,300 MT, compared to 196,000 MT at the same date of the previous season. Given the production limitation and the milling industry’s resistance to the fall in demand, the wheat available for sale is 43% lower than that available last season. The effective balance volume of 9 Mil MT was previously fixed by the national authorities for the beginning of 2022, and was practically reached in June last year.

Regarding local prices, and after a period of several weeks in which no participants in the domestic market were manifested, open purchase values began to be offered on the trading floor of the Rosario Stock Exchange, which ranged between 285 USD/MT and 280 USD/MT valued at the official exchange rate of the National Bank. This decrease of 5 USD/MT in open offers occurred at the end of February and denotes a certain downward trend in cereal prices domestically, in line with what is happening in the Chicago market.

In the North American market, the highest volume wheat futures traded reached pronounced declines in recent days, falling to levels not seen since November 2021. Several factors are identified, like the higher new wheat planting prospects in the US and weather conditions showing some improvement in the North American plains. On the other hand, the competitiveness of grain from the Black Sea and Australia had a negative impact on US grain prices.

Another development in this week’s trade came from Turkey’s state grain board (TMO), which has provisionally purchased some 790,000 MT of wheat in an international tender. Russian wheat was among the purchases, along with Ukraine and a variety of other origins, especially from Black Sea countries.

Finally, the United States Department of Agriculture (USDA) estimates increases in wheat ending stocks in China, Australia and Russia for this production cycle, the downward effect of which tends to offset the upward impact of a lower level of global ending stocks than last cycle. However, a fall in ending stocks is projected for the United States, Argentina, Ukraine and India, and this is causing rearrangements within the commercial supply.


Source: https://bcr.com.ar/

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