Commodities Shuttle: Wheat production rises 19% to 9.2 million tonnes

With the 2021/22 grain crop practically set, wheat was one of the surprises this year. Favorable prices and demand, both in the domestic and foreign markets, led producers to increase their planted area by 8%, to 2.96 million hectares.

In addition to the increase in area, Brazil should have more favorable weather conditions, which raises the national average productivity to 3.1 tons per hectare, 10.5% higher than the previous harvest.

Larger area and productivity will allow the country to reach a record harvest of 9.2 million tons, 19% more than the previous one.

Without this increase in production, the country would experience difficulties in supplying this cereal, since exports from August 2021 to July 2022 reached a record 3 million tons. Wheat is one of the few crops in which the country is still heavily dependent on the foreign market.

The better scenario in wheat production is due to producers in Rio Grande do Sul, who will sow 1.4 million hectares, 18% more than last year.

On the other hand, the people of Paraná, despite good domestic prices, opted for corn and reduced the area planted with wheat by 4% in the period, according to a follow-up by Conab (Companhia Nacional de Abastecimento).
In addition to the South, Northeast and Southeast will also plant more, with increases of 15% and 28%, respectively, in cereal areas.

The cultivated area of ​​Bahia is still small, but the irrigation of the culture will allow the producer of the state to obtain 5.7 tons per hectare, 82% more than the average of the South region, main producer.

The increase in production raises the ending stocks of the 2022/23 crop to 1.6 million tons, well above the 726 thousand of the previous crop. This level, however, is still 37% lower than the annual average of 2.5 million tons from 2016 to 2020.

In the domestic market, the ton of wheat was traded at R$ 2,005 in Paraná this Thursday (11), with a drop compared to the end of July, according to Cepea (Center for Advanced Studies in Applied Economics).

In the foreign market, also in decline, the supply of product is still uncertain, since the hot weather affects the crops in Europe and the United States.

In addition, it is impossible to determine Ukraine’s production potential in the next harvest. One of the main suppliers of the world market, the country has its plantation affected by the war with Russia.

An eventual drop in production in the Northern Hemisphere, provided that prices are favorable, will take more Brazilian product to the foreign market.

Total grain production for the 2021/22 crop is expected to reach 271.4 million tonnes, a record volume, but well below initial estimates of 290 million tonnes. This drop is due to the production of soy, which, estimated at 144 million, stood at 124 million.

External market Commodity prices rose again, due to uncertainties in the American crop. Soybean rose 0.7%; corn, 1.3%; and wheat, 1.4%, according to negotiations on the Chicago Stock Exchange.

Coffee The dry climate has favored the coffee harvest in Brazil, according to Rabobank. Until the beginning of this month, 83% of the coffee area was already harvested, according to private consultancies, reports the bank.

Rice July exports grew and reached the highest monthly volume of the year, totaling 207 thousand tons of the product in bark. Cuba, Peru and Venezuela are among the main destinations, according to Abiarroz, an entity in the sector.

Only filet Brazilian meatpackers had substantial net profits in the second quarter of this year. JBS ended the period with global net income of R$ 4 billion; Marfrig, with R$ 4.3 billion; and Minerva, with R$ 425 million.
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