Most of the Canadian Prairies were blanketed with snow during the last week of October, which likely had many people dreaming of vacations to warmer climates to the south. With the Canadian harvest all but wrapped up, and the United States in its final stages, the grain markets are also shifting their attention southward.
Argentina
Drought-stricken Argentina finally saw some much-needed rain in late October, with the advent of El Niño weather patterns likely to bring more moisture to the country. The precipitation was welcome for the country’s wheat crop, helping improve yield potential while weighing on North American futures markets.
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Argentina’s wheat harvest typically gets started in December. Farmers there are now planting the corn and soybeans that will be harvested in the March/April/May timeframe. The moisture should aid in germination and had analysts speculating that some intended corn acres could switch back to soybeans.
Argentina is the world’s largest exporter of soymeal, and tight exportable supplies contributed to soymeal futures hitting contract highs at the Chicago Board of Trade.
The country is also in the midst of a presidential election, with current economy minister Sergio Massa ahead of libertarian Javier Milei after the first round of voting. Business-friendly Patricia Bullrich dropped out. The runoff is set for Nov. 19. Argentina’s economy is in tatters as it deals with triple-digit inflation and farmers are uncertain about both top contenders.
Agricultural exports are a key feature of Argentina’s economy. The latest political initiatives include an incentive program to boost soybean exports and bring more money to the country’s coffers.
Brazil
The neighbouring country is also seeding its next corn and soybean crops and more moisture is needed. Soybean planting was running slightly behind normal, which could delay planting for the next corn crop.
Total production estimates for the country are still large, but any shifts in that outlook have the potential to sway the futures markets.
Australia
Wheat, barley and canola will be coming off the fields Down Under over the next few months, with recent rainfall helping boost crop prospects. While production of all three crops is expected to be down from last year’s record levels, any improvements in yields would be bearish for Canadian prices because Australia is a major competitor in many markets.
