Grain prices do not stop falling, and soybeans and corn reached three-year lows on the Chicago Market, losing around 10 percent so far in 2024. While wheat also continues to rise down and lost 7 percent this year.
Soybeans, for example, went from USD 550 in January 2023 to USD 455 in the first month of this year in Chicago, and the futures stood yesterday at USD 427.06 for March, USD 428.44 for May, USD 421 .73 for September and USD 419 for November.
For its part, in the Matba Rofex, the local futures market, a year ago, the position May 23 (peak harvest month) for soybeans closed at USD 382 while yesterday, the future May 24 for soybeans ended in USD 275. According to the Mediterranean Foundation, this price scenario, if confirmed, would imply a loss of 18 percent of the real value of the oilseed this campaign compared to 2023 and of 24 to 28 percent compared to the peaks of 2021 and 2022. .
The dynamics of the international corn and soybean market are complex and the factors that explain the collapse are several: adjustments in the area and supply, lower Chinese demand, the rise of the dollar, the flight of funds and the evolution of the climate in productive areas.
On the one hand, "the USDA (United States Department of Agriculture) report projects an
increase in soybean acreage by 2024
, with higher stocks expected for corn, soybeans and wheat compared to the previous year," explained the market analyst Esteban Moscariello from Díaz Riganti Cereales.
The USDA estimates that
final soybean stocks will rise 38 percent
towards the end of the 2024/25 harvest, which puts downward pressure on prices of the oilseed and its derivatives.
Foreign soybean sales remain 28 percent below last year's pace in the United States, although the National Oilseed Processors Association (NOPA) stated that crushing in January fell more than expected, which would set a limit to losses.
For the northern country, the USDA also projects a 17 percent increase in the final corn stock and a robust harvest.
There, foreign sales of this cereal are 40 percent lower than the previous year.
On the other hand, the recent
rains
in Argentina made it possible to stop the deterioration that soybean and corn crops had been suffering due to thermal and water stress, and led to an improvement in their condition, consequently, the losses in yield will not be so marked. and a good harvest of coarse grains is expected. "The prospects of an
adequate supply in South America
, even in the face of the loss of crops in Brazil, give way to continuous falls in the futures market," explained Moscariello.
A key reason for the collapse of soybean futures prices is the
decrease in Chinese demand
that occurs during the current holidays in the Asian giant, which means that there have been few shipments made so far.
However, "trade activity is expected to gradually increase once China resumes activities after the Lunar New Year," the analyst noted.
As Moscariello explained, Brazil's greater competitiveness compared to the United States also has its share of responsibility in the downward pressure on oilseed futures, partly due to the rise in the dollar and the fall in premiums, which makes that the Brazilian product is cheaper compared to that of the northern country.
Likewise, the
departure of investment funds
that fled from commodities also drove the collapse of grain prices.
"The development and conclusion of the South American harvest continue to be monitored by traders, as well as consumption, the macroeconomic scenario and the positioning of investment funds," said Moscariello.
The evolution of all these variables will be determining the movement of commodity prices and short- and long-term trends.