- Location
- Stoneleigh
Both Chicago maize and soyabean futures (May-23) have been pressured from their multi-month highs set on Tuesday this week. Keeping the market elevated has been the drought in Argentina from the successive third La Niña weather event.
However, widespread rains are now forecast in the coming 7 days over Northern Argentina which will benefit or even potentially salvage some of the production for these two respective crops.
As shown in the graph above, parts of the Buenos Aires region (which accounts for respectively 31% and 27% of Argentinian soyabean and maize production) are going to receive up to 4 inches of rain. With much of the agricultural region getting rain in some quantity over the next week if the forecast is realised. Further to that, weather forecasts further ahead show that rains are going to continue in this region into February, which could potentially constrain any further downwards revisions, which we have recently seen. Though how much falls will be closely followed by the market.
There has been a series of revisions to Argentinian crops recently, with the largest cuts made to soyabeans. The largest cut was from the Rosario Grain Exchange last week, slashing their 2022/23 soyabean production estimate from 49Mt to 37Mt in one hit. The USDA made more conservative trims in their latest World Agricultural Supply and Demand Estimates, cutting the respective Argentinian crops inline mostly with analyst expectations.
Although rains are expected, over the next month if drought like conditions continue, we could see further revisions to this crop, tightening global supply further.
But what is critical to note, although Argentinian crops have had damaging production prospects from this drought, Brazil is still expecting a record maize and soyabean going into 2023, which could weigh on the market.
Today's Grain Market Daily is now published - Argentinian rains to bear on the market?
For information on price direction make sure to subscribe to Grain Market Daily and Market Report from our team.
However, widespread rains are now forecast in the coming 7 days over Northern Argentina which will benefit or even potentially salvage some of the production for these two respective crops.
As shown in the graph above, parts of the Buenos Aires region (which accounts for respectively 31% and 27% of Argentinian soyabean and maize production) are going to receive up to 4 inches of rain. With much of the agricultural region getting rain in some quantity over the next week if the forecast is realised. Further to that, weather forecasts further ahead show that rains are going to continue in this region into February, which could potentially constrain any further downwards revisions, which we have recently seen. Though how much falls will be closely followed by the market.
What does this mean?
There has been a series of revisions to Argentinian crops recently, with the largest cuts made to soyabeans. The largest cut was from the Rosario Grain Exchange last week, slashing their 2022/23 soyabean production estimate from 49Mt to 37Mt in one hit. The USDA made more conservative trims in their latest World Agricultural Supply and Demand Estimates, cutting the respective Argentinian crops inline mostly with analyst expectations.
Although rains are expected, over the next month if drought like conditions continue, we could see further revisions to this crop, tightening global supply further.
But what is critical to note, although Argentinian crops have had damaging production prospects from this drought, Brazil is still expecting a record maize and soyabean going into 2023, which could weigh on the market.
Today's Grain Market Daily is now published - Argentinian rains to bear on the market?
For information on price direction make sure to subscribe to Grain Market Daily and Market Report from our team.