With the exemption from TEC (Common External Tariff) granted by the government to the United States, the price of North American wheat at the mills in São Paulo became equal to the price of wheat from Paraná, taking away the market. “Because it is apparently better and becomes more competitive than Argentine wheat”, points out analyst Luiz Fernando Pacheco, from T&F Consultoria Agroeconomia.
“However, it seems that, before the first shipment begins, it is necessary to discuss how these imports would occur, whether in proportion to the volume of imports last year, whether by state, by pure and simple request, etc. so many analysts believe they could take a while, not affecting this season (which ends on July 31st) and only having an impact from May 2020 onwards”, explains Pacheco.
FUNDAMENTALS
Still according to the T&F analyst, for now, there are no grounds for a rise in wheat in the short term. The most optimistic news about the wheat market in the last 30 days was Brazil's announcement of the release of a quota of 750 thousand tons of tax-free wheat imports for countries outside Mercosur, but even this did not give encouragement to Chicago prices, which did not change levels significantly.
“In Brazil, for the second semester, everything will also depend on the weather. If it helps, the country should harvest a larger harvest than the previous harvest, not the 6.6 MT announced last week, but something around 6.0 MT, also not due to the increase in area, but in yield, because the climate is expected to be rainy in winter. As a result, imports should reduce slightly. Another important announcement was made by Abitrigo, that the crushing of Brazilian mills in 2018 was 12.2 million tons, against the 11.41 MT estimated by Conab”, concludes Pacheco.
Source: agrolink | Author: Leonardo Gottems
