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- Stoneleigh
Since the start of November last year, there has been an element of support for nearby Chicago soyabean prices. Part of this support has been from the on-going drought in Argentina. The last four months of 2022 in Argentina were the driest in 35 years, about 44% below normal and 34% drier than last year (Soybean & Corn Advisor). This has had huge implications for their wheat crop and plantings for their soyabean and maize crops.
Based on yesterday’s close, nearby Chicago soyabeans are down 3.5% this week (Fri to Thurs). This downward drift is from spill over pressure in crude oil and the general uncertainty for commodities with recessional fears and rising COVID-19 cases in China.
However, we are nearing the end of Argentina’s soyabean planting window and if additional rains do not come before the middle of this month we could see revisions to the planted area, which will ultimately mean a revision in production. This has the potential to keep an element of support in the oilseed complex which will ultimately to some extent keep wider oilseed values supported.
It is reported that rains over the central and south agricultural areas in recent days has aided planting progression. However, it is reported that over 100Kha of planned area for soyabean plantings are at risk as soils are still too dry in northern-central part of Santa Fe (a productive soyabean region) (Refinitiv).
Forecasts over the next seven days show that some rains are forecast in this region, is it enough? Large parts of productive regions in Cordoba and Buenos Aires are going to receive rains which will aid crop development.
With soyabean markets to some extent pricing in the risk premium from this La Niña impact, markets now await further information on the impact to soyabean crop production. But what’s critical to note, is that the large Brazilian crop prospects have not been impacted by this weather, with conditions considered favourable. Brazil is expected to produce a record soyabean crop, so will South American production overall still be large?
Today's Grain Market Daily is now published - Argentina soyabean plantings still a critical watchpoint
For information on price direction make sure to subscribe to Grain Market Daily and Market Report from our team.
Based on yesterday’s close, nearby Chicago soyabeans are down 3.5% this week (Fri to Thurs). This downward drift is from spill over pressure in crude oil and the general uncertainty for commodities with recessional fears and rising COVID-19 cases in China.
However, we are nearing the end of Argentina’s soyabean planting window and if additional rains do not come before the middle of this month we could see revisions to the planted area, which will ultimately mean a revision in production. This has the potential to keep an element of support in the oilseed complex which will ultimately to some extent keep wider oilseed values supported.
What is currently happening in Argentina?
Latest updates from Buenos Aires Grain Exchange estimate (until 04 Jan) that Argentina’s soyabean plantings are at 81.8% complete, 11% behind the previous five-year average.It is reported that rains over the central and south agricultural areas in recent days has aided planting progression. However, it is reported that over 100Kha of planned area for soyabean plantings are at risk as soils are still too dry in northern-central part of Santa Fe (a productive soyabean region) (Refinitiv).
Forecasts over the next seven days show that some rains are forecast in this region, is it enough? Large parts of productive regions in Cordoba and Buenos Aires are going to receive rains which will aid crop development.
With soyabean markets to some extent pricing in the risk premium from this La Niña impact, markets now await further information on the impact to soyabean crop production. But what’s critical to note, is that the large Brazilian crop prospects have not been impacted by this weather, with conditions considered favourable. Brazil is expected to produce a record soyabean crop, so will South American production overall still be large?
Today's Grain Market Daily is now published - Argentina soyabean plantings still a critical watchpoint
For information on price direction make sure to subscribe to Grain Market Daily and Market Report from our team.