According to the report published last Friday (9) by the International Center for Economic Analysis and Agricultural Market Studies (Ceema), wheat prices in Brazil remained stable last week, although higher quality wheat is showing an upward trend. The wheat harvest is expected to begin in Paraná in September, which may influence the market.

The average wheat price in Rio Grande do Sul closed last week at R$68.80 per bag, while in Paraná prices remained at R$76.00 in the main local markets. In July, the real average price of wheat in Rio Grande do Sul rose, reaching R$1,468.41 per ton FOB, the best monthly average since December 2022, and exceeding the average value of July last year by 8.3%, according to data from Cepea/Esalq.

On the national and international scene, the wheat market believes that the “rock bottom” in prices has already been overcome, according to an analysis by TF Agronômica. The trend is for firmer prices, depending on the final performance of the new national and Argentine harvests. TF Agronômica also notes that the wheat market in Rio Grande do Sul is facing problems with cost transfer, generating dissatisfaction among industry participants. The situation in the local market remains apathetic, with mills well supplied and complaints concentrated on milling and low margins. The recommendation to mitigate financial risks is to use the futures market.

In Santa Catarina, wheat from the last harvest, as well as that from the new harvest, is currently the cheapest, which leads Santa Catarina mills to extend their stocks due to the lack of demand and the economic viability of flours. These mills are getting supplies from Rio Grande do Sul and hope to supplement their stocks with the new harvest from Paraná and the state of Rio Grande do Sul itself.

In Paraná, the expectation is for a larger harvest, even with a significant reduction in the planted area. Current prices for the new crop may be profitable for producers, with buyers offering R$1,650.00 CIF mill since the end of last week. However, buyers are seeking to pay a maximum of R$1,600.00, highlighting the sensitivity of prices to exchange rate fluctuations and available supply.

Source: Agrolink