U.S. wheat futures edged higher on Friday and were set for their biggest weekly gain in four years as adverse weather stoked concerns about global supplies.
Low water levels in the key river networks joining Argentina’s main crush, grain, and oilseed export terminals with international markets could put almost 14 million tonnes of expected exports at risk of underloading between the beginning of July and the end of September. The dry conditions across much of South America have left the river network facing historically low levels, potentially compromising its role as the main transit route for Argentine corn, wheat, and soybeans to the global market. Low water levels mean bulk carriers are unable to convey full loads, leaving excess volumes of both primary agricultural production and the vegoils or meals produced by the region’s huge crush sector to pile up at the port, or forcing carriers to take on extra volume at other ports in Brazil, Uruguay or Argentina’s Atlantic coast.
Analysis of export registration data, published daily by the Argentine government, suggests that up to 19 million mt of export licenses have been booked and are expected to be shipped between July 1 and September 30, according to Agricensus research. Looking at line-up data from Maritima agency Nabsa, around 72% of Argentina’s agriculture exports currently pass through an Up River hub – primarily through the San Lorenzo port, around 330 kilometers northwest of Buenos Aires. But more and more of that volume is likely to have to be loaded outside of Up River facilities, as the key rivers face emergency dredging to keep vessels moving and amid expectations from port authorities that levels will continue to decline through to late September at least.
Much of the lineup is dominated by corn, with 11.3 million mt booked, followed by 3.2 million mt of a meal, 1.3 million mt of soybeans, and 1.2 million mt of wheat.
Wheat long (Buy)
Enter at: 680.22