With the Argentine crop failure, Brazil will need to buy wheat from other sources

Brazil should buy wheat from countries like the United States, Canada and Russia, given the reduction in the Argentine crop, predicts SAFRAS & Mercado analyst and consultant, Elcio Bento, during a lecture held at the 4th CROP Agri Week.

According to estimates by SAFRAS & Mercado, the planted area in Argentina should reduce by 866,000 hectares, and production should drop 8 million tons in relation to the initial estimate.

“This is happening because many crops are bad due to the lack of rain in the country. With the situation in Argentina, it is possible that we will see Russian wheat entering Brazil in the second quarter,” he says.

According to analyst Elcio Bento, the main news for wheat continues to be what comes from the Black Sea, as the issues are still undefined, and these factors bring volatility to the cereal.

However, Bento believes that we will not return to the levels of the beginning of the war, because now we know what it can generate.

The main countries that had a reduction in the harvest were India, Argentina and Australia. In contrast, the largest producers were Russia, the European Union and Canada. At the beginning of the war, with Ukraine out of the wheat market, Argentina and India were the main alternatives.

In Brazil, there was a record harvest, despite the rains in early September and the fact that at least 50% of the harvest in the state of Paraná suffered quality losses due to these precipitations.

CONAB

Brazilian wheat production in 2022 is expected to reach 9.5 million tons, according to the 2nd survey for the Brazilian grain harvest by the National Supply Company (Conab), against 7.68 million tons in the previous year.

In October, the forecast was 9.36 million tons. With the consolidation of the aforementioned data, the crop should end with carry-over stock of 1.333 million tons.

In October 2022, all eyes were on the weather. The uninterrupted rains in the state of Paraná, compromising both the quality and the quantity of wheat harvested, acted as the main reason for the rise in prices. As a result, wheat from the state of Rio Grande do Sul, which until then had not been harmed, also ended up being benefited.

In Paraná, the monthly average of wheat bread PH 78 was quoted at R$95.42 per 60-kilogram bag, with a monthly appreciation of 2.6%, and in Rio Grande do Sul at R$93.81 per 60-kilogram bag, with appreciation of 0.6%.

297,600 tons of wheat were imported, 20.3% less than in the previous month and 42.5% less than in the same period last year.

The reduction observed is due to the expectation of a record national harvest, thus reducing the need for imports. Of the total imported, 41% is Argentine wheat, 34% from the United States, 10.9% from Russia, 8.7% from Uruguay and 5.6% from Paraguay.

With information from SAFRAS Agency/Dylan Della Pasqua