Improved weather conditions in South America reduce the impact of the weather factor on prices

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Traders ‘ attention is focused on weather conditions in South America, where a sharp increase in soybean and corn production was expected due to the expansion of sowing areas and improved yields after the dry previous season. However, the lack of precipitation in Argentina and southern Brazil forced experts to lower their forecasts.

In Brazil, there was a strange situation when in the south of the country in December and early January there was a shortage of moisture, and in the North and in the center, heavy rains led to floods and diseases on soybean crops, which negatively affected the overall harvest in the country.

This week in the south of the country, in the states of Paran and de Sul, heavy precipitation occurred, which improved the condition of soybean and corn crops of the first crop, and in the center and in the north, the amount of rain decreased, which allowed to activate soybean harvesting, and then start sowing Corn of the second crop.

Next week, rain will fall throughout Brazil, which will improve the condition of late crops and replenish soil moisture reserves before sowing safrinha corn, especially in the South. Forecasts for the soybean harvest in the country were lowered to 133-141 million tons compared to November estimates of 144-145 million tons and last year’s 138 million tons. this keeps soybean prices at a high level, but as it is collected and production data is refined, we can expect an adjustment of quotations.

In Argentina, due to dry conditions in December and early January, the soybean crop potential decreased from 50-52 million tons to 40-46 million tons (46.2 million tons in 2020/21 mg), and corn – to 54-57 million tons (50.5 million tons in 2020/21 MG). Next week, rain will fall across the country, which will improve the condition of late crops, which are sown more this season. The drought has caused irreversible damage to early soybean and corn crops, and the rains will not be able to significantly improve their condition.

Traders are concerned about the weather with above-normal temperatures and low precipitation in the United States, which can worsen the condition of winter wheat crops, especially in the West. Within two weeks, several cold air fronts with light precipitation in the form of snow will pass throughout the country. The western and southern regions of the southern plains of the United States are suffering from a lack of moisture, but next week there will be light precipitation in the form of snow.

In Ukraine and Russia, there are mostly satisfactory meteorological conditions for wintering winter crops. There were almost no frosts that could damage the crops. The height of the snow cover in the central regions of Russia is 10-30 cm, in the southern regions – 1-5 CM, while in Ukraine there is no snow in most of the fields. In the next 7-10 days, temperatures are expected to drop to -8…-5 OhC and heavy snowfalls that will replenish moisture reserves.

 

GrainTrade

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