Argentine farmers are in no rush to sell wheat

Argentina’s wheat market remains relatively calm as exports slow seasonally. Exporters are currently focused on shipping corn and soybean products, while wheat trading has taken a back seat. Logistics are also being dominated by the late harvest of the country’s record corn crop.

According to analysts, farmers have little financial incentive to sell their remaining wheat stocks. About 65% of the current crop, or nearly 20 mln tons, has already been marketed, roughly equivalent to Argentina’s typical annual wheat production. Strong cash flow and active corn sales allow growers to postpone wheat sales.

Trading has also been slowed by significant differences in grain quality. Wide price spreads based on quality have made it increasingly difficult for exporters to source wheat, reducing activity in the physical market.

Meanwhile, planting of the new wheat crop is more than 80% complete and is progressing at a normal pace, broadly in line with last year. The critical period will come in September and October, when weather conditions will determine both yield potential and grain quality. The possible development of El Niño and excessive rainfall could once again affect wheat quality.

Analysts say market participants will closely monitor the pace of new-crop sales in the coming months, as it will help shape December wheat futures and determine future export prices for Argentine wheat.

Tags: export, prices, wheat, Argentina