Commodities Shuttle: US heat warms up agricultural commodity prices

The fall in prices on the international market of agricultural commodities, caused by the agreement between Russia and Ukraine to withdraw Ukrainian stocks from the country, lost its effect.

For the second day, the main commodity exchanges recorded accelerated highs. “A climate of total tension came on the scene for the next 30 days, due to the drought in the crops in the United States”, says Fernando Muraro, director of AgRural, from Curitiba.

In his assessment, the “rain and no rain” is what will determine the behavior of the market in the coming weeks. Corn is in a grain filling period. Soybeans go through a period of pod formation. Both crops need water.

The weather situation this year is much more complicated than that of the previous crop. The climate is hot both during the day and at night. Last year, the days were hot, but the temperature dropped to 12ºC at night.

During the day temperatures are between 35ºC and 40ºC. At night, they drop to just 25ºC. The region with the worst crops is the Mississippi River Delta, where the hot climate punishes production the most, says Muraro.

The behavior of the rains in the coming weeks will determine the productivity of the crops. The USDA (US Department of Agriculture) September crop report should better reflect their performance, he says.

As had happened on Monday (25), commodities rose again this Tuesday. As a result, soybeans returned to US$ 15 per bushel (27.2 kg) and accumulated a rise of 7% in the last two days on the Chicago Stock Exchange. Wheat rose 6%; corn, 5%; and soybean oil, 3%.

In the domestic market, prices also reacted and reflected the drought climate in the United States. The bag of soybeans was sold at R$ 184 in Cascavel (PR), up 2% compared to last week, according to AgRural. In Sorriso (MT), the bag was traded at R$ 162, up 1.3%.

In the same period, the sack of corn increased by 1% in Cascavel and Sorriso. In the city of Paraná, it was quoted at R$ 78.5; in Mato Grosso, at R$ 58.

This heat wave doesn’t just affect the United States. The so-called “heat apocalypse” spreads across the European Union, United Kingdom, Canada, India, regions of South America and Australia.

In some cases, as in Italy, the heat is the highest in 70 years, and production losses in crops are already expected.

This unfavorable climate makes it difficult to rebuild world food stocks, which are the lowest in seven years when compared to world consumption. The ratio between stock and consumption is 26% in this harvest.