Rainfall shortages in Argentina, surpluses in Brazil and frost in the US weigh on crop prices this week
The main weather factors affecting agricultural markets remain the drought in Argentina and the predicted frost in the US, which could damage weak winter wheat crops.
Since Thursday, winter wheat growing regions in the USA have experienced frosts of -17...-20 o C, which can damage crops that are not covered by snow and are in poor condition after a dry autumn.
However, the speculative increase in prices was short-lived, as the frost will not last long, and warm weather will return to the region by the weekend with little precipitation in parts of Oklahoma and Texas, where the condition of crops is quite poor due to drought.
A front brought rain to Argentina 's main soybean and corn growing regions this week, sending soybean prices lower. In the next 7-10 days, heat is expected again at 28-30 o C without significant precipitation, which will continue to worsen the prospects of the harvest.
As of January 27, soybeans in Argentina were sown on 98.8% of the planned areas (100% last year), although the optimal sowing dates have already been reached. The recent rains will improve the condition of crops and allow farmers to complete field work. Local agencies estimate the soybean harvest in the country in FY 2022/23 at 38-39 million tons, and the USDA at 45.5 million tons, but on January 31, a representative of the US MSG in Buenos Aires lowered the production forecast to 36 million tons, which is 9 .5 million tons is inferior to the official USDA forecast.
Rain is still falling in northern and central Brazil and will continue into next week. They delay the harvesting of soybeans and the planting of second-crop corn. According to AgRural experts, as of January 26, soybeans in the country have been threshed on 5% of the area (+3% in a week), which is twice as much as last year's figure. Due to the long drought in the south of the country, SAFRAS&Mercado analysts reduced the corn production forecast in 2022/23 MR by 1.3 million tons to 125.3 million tons (113.1 million tons in 2021/22 MR) compared to previous estimates, and the area to harvesting - up to 21.6 million hectares. The forecast for the production of first-harvest corn was reduced by 1.1 million tons to 23.7 million tons (-1.3 million tons for the year), and for second-harvest corn - by 0.2 million tons to 87.7 million tons (-1. 8 million tons per year) due to a possible delay in sowing.
The experts of the IKAR agency lowered the forecast for the wheat harvest in the Russian Federation in 2023 from 87 to 84 million tons against the background of three main factors: the onset of ice in the fields south of Moscow, dry weather in the south of the country and frosts up to -30 o C and below, which could damage crops in several regions.
