Wheat prices on the Chicago Stock Exchange are expected to continue bullish by the end of the year. The consultancy INTL FCSTone explains that the expectation is generated by climatic complications in some of the main producing regions around the globe. “This movement is atypical considering that the seasonality of wheat prices in the northern hemisphere suggests a sharp drop in cereal prices from August, a trend that extends to the month of December”, says the company in a report . In comparison with the average of the last three years, the current price level is 14.3% above that observed. Severe drought in producing regions around the globe continues to be the main catalyst for price gains. After the beginning of the first half of the year, water scarcity in several countries, such as the United States, Argentina, Russia and Ukraine, in the middle of the semester, concerns about the crops of Australia, Canada, the European Union and even Brazil became the center of attention of the agents. The climate of caution regarding the South American country’s harvest has given support to Argentine prices, which were already high due to the expansion in exports of the country promoted by the record supply of 18 million tons in 2017/2018. The exception was observed at the beginning of September, when the Argentine government announced that it would reapply taxes on exports on wheat. According to the company, even in the context of high prices, Brazil has imported a larger volume than the average of the previous three years since November 2017, except for the months of March and June of 2018. Only in July of this year, there was 68.9% increase in the volume of Argentine wheat imported into Brazil.
Src.: Canal Rural