Harvesting presses down quotes in PR, which are lower than in RS

Cepea, October 2, 2020 – Wheat prices dropped in Paraná State (PR) in mid-September, influenced by the harvesting of the new crop. In Rio Grande do Sul (RS), quotes decreased too, but not as sharply – it is worth to mention that, in RS, the harvesting usually starts between October and November. Thus, the average wheat price in PR was lower than that in RS in the second fortnight of the month, which is unusual.

 

Considering the series of Cepea, which started in 2004, prices in RS were higher than in PR only a few times (between September and October 2004; in Sept. 2015; in Sept. and in Oct. 2017 and in August 2020).

 

However, at the end of the month, prices resumed rising in PR – wheat farmers were away from the market, since the drought may damage crops, reducing wheat quality and supply compared to that previously estimated –, while in RS, quotes weakened, but continued higher than in PR. In Argentina, the drought was damaging crops, and production may be lower than that last year.

 

In September (until Sept. 25), the average price for the wheat sold in the wholesale market (trades between processors) of PR was 1,156.14 BRL per ton, 4.6% down compared to that in August. In RS, the average was 1,209.28 BRL/ton, 2.1% down in the same comparison

 

Cepea collaborators reported that the few deals closed in the Brazilian market were concentrated in northern PR. Thus, cooperatives were working with higher prices, aiming to attract wheat farmers – readjustments were passed on to the wholesale market too.

 

CROPS – According to Deral/Seab, the harvesting had reached 44% of the area in PR, and 29.2% of the output had been marketed until the end of September – against 16% in August. Until Sept. 23, 61% of the total area sown with wheat was in good conditions, 31%, in average conditions, and 9%, in bad conditions. In Rio Grande do Sul, according to Emater, rains in late September favored the recovery of soil moisture. In some regions, lower temperatures resulted in frosts, which did not damage crops.

 

In Argentina, according to the Buenos Aires Grains Exchange, the hydrous conditions of the crops sown worsened. Around 60% of crops had poor soil moisture. Besides, the 2020/21 crop, forecast to be harvested in December, has been estimated at 17.5 million tons, against 18.8 million tons in 2019/20.

 

IMPORTS – Until the third week of September, Brazil had imported 22.9 thousand tons of wheat per day, on average, against 23.5 thousand tons in Sept/2019. Imports price averaged 223.00 USD/ton FOB, 4.2% lower than that in the same period last year (232.70 USD/ton), according to Secex (Foreign Trade Secretariat).

 

(Cepea-Brazil)

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