Dec 22, 2020

Ag Markets Mixed with Beans Continuing Firmer

Argentina soy strike drags on

South American Forecast

  • Most of Argentina received timely, but light rains over the weekend.
  • A pattern of less than normal precipitation is forecast to develop over the next two weeks.
  • Warm to hot temperatures this week will quickly evaporate moisture from recent rains and continue into the second week of the outlook.
  • Winter wheat maturation and harvest conditions will advance due to limited precipitation and warm to hot temperatures.
  • Light to moderate rain fell over much of Brazil during the weekend, missing some of the northeast.
  • The 10-14 day forecast has the greatest rain from Mato Grosso and northern Mato Grosso do Sul to western and southern Minas Gerais.
  • Temperatures become cooler in this region and which will help preserve increases in soil moisture.

FBN’s Take On What It Means: In Brazil, crops in remaining dry areas will benefit from significant rainfall and increases in soil moisture. However, concern remains for Argentina where extremely dry soil conditions noted at the end of last week benefitted from rain over the weekend, but it was not enough for a lasting improvement. Significantly dry conditions are forecast to return by the end of the week. Increasing crop stress will raise the potential for crop development issues and concern over production.


Argentina Soy Strike Drags On

  • The strike by unions for workers at soy crushers and ports has lasted almost two weeks.
  • As many as 100 ships are being prevented from loading grain in the main port at Rosario.
  • Contract talks between workers and export companies have broken down over the extent of wage increases needed to cope with high inflation.
  • There have been no reports whether negotiations set to begin last night have made progress.
  • The Rosario Exchange projects grain exports will decrease to $21.4 billion, down over $1.3 billion from last season.

FBN’s Take On What It Means: It’s surprising the Argentine government has allowed this strike to linger on as long as it has. Grain exports are by far its largest source of hard currency needed to keep the economy functioning. Without intervention, there is potential the stoppage lasts through New Years. It’s likely at least some business will get pushed to the US which is supporting higher prices here.

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Kevin McNew

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Marketwatch: Jan, 18

US Corn Price Idx: ZCPAUS.CM

open: 5.7667
high: 5.8486
low: 5.7266
close: 5.8288

US Soybean Price Idx: ZSPAUS.CM

open: 13.366
high: 13.376
low: 13.2328
close: 13.2696

US Hard Red Winter Wheat Price Idx: KEPAUS.CM

open: 7.3061
high: 7.3384
low: 7.2334
close: 7.2454

US Soft Red Winter Wheat Price Idx: ZWPAUS.CM

open: 7.0114
high: 7.0566
low: 6.9566
close: 7.0014