Soybean Prices Surge High In a Week on Concerns Over Crop Losses in Drought-Hit Argentina.

SINGAPORE: On Wednesday, worries about crop losses in drought-hit Argentina drove Chicago soybean futures to their highest level in more than a week.

Concerns about supplies from the war-ravaged Ukraine supported Wheat’s rise.

As of 0310 GMT, the most-active soybean contract on the Chicago Board of Trade (CBOT) had increased to $15.48-3/4 a bushel, its highest level since February 13th.

While Wheat gained 0.1 percent to $7.63-3/4 a bushel, and corn gained a quarter of a cent to $6.80-3/4 a bushel on Argentina’s supply woes.

Argentina, the world’s largest exporter of soy products like soyoil and soymeal, is experiencing yield declines as a result of a severe drought. Argentina is a major producer of corn and soybeans.

Over the next ten days, the amount and coverage of precipitation in Argentina’s crop belt will remain limited, allowing extensive dryness and stress to continue on late crop growth.

In a report, commodity research firm Hightower stated, “Traders indicate that another heat wave in South America could increase the intensity of the drought.”
“Heat could hinder yield potential because the Argentina soybean crop is near the peak reproductive stage right now.”

The Rosario Grains exchange reported on Friday that the country’s corn exports should decrease by approximately 40% year-over-year between March and June.

However, the soybean crop that Brazilian farmers are harvesting is anticipated to be the largest ever. Despite the fact that rains have slowed progress in some areas, agribusiness consultancy AgRural reported on Monday that Brazilian growers harvested 25% of the soybean area planted for 2022/23 as of last Thursday.

In light of the escalation of fighting in eastern Ukraine, traders have been evaluating the likelihood of a Black Sea shipping corridor being maintained during the war from Ukraine. A day after his American counterpart Joe Biden visited Kiev, Russian President Vladimir Putin issued a nuclear warning to the West regarding Ukraine.

The northern Plains and Midwest should receive a blanket of insulating snow this week from a winter storm, but the precipitation is unlikely to reach drought-affected areas of the southwestern Plains winter wheat belt.

The market is looking forward to the annual Outlook Forum, which starts on Thursday and lasts for two days. During the forum, the U.S. Department of Agriculture is expected to release preliminary forecasts for major crop plantings and production in 2023.

The government of India announced on Tuesday that it would provide an additional 2 million tonnes of wheat to bulk consumers like flour millers as part of efforts to reduce prices, which reached a record high last month.