High dollar favors sale of national wheat

The strong appreciation of the dollar against real-high 13% in March and 22% in cumulative 2015 – can assist in the marketing of wheat imports of the commodity front national of neighboring countries such as Argentina, Paraguay and Uruguay, in addition to the United States and Canada. According to the weekly survey from the Center for advanced studies in applied economics (Cepea), Mills returned to replenish stock and have given preference to the national cereal. With the constant American currency appreciation, the imported wheat is getting more expensive for Brazilian buyers.
Now, for the triticultor paranaense, the timing is excellent for trading stocks. The Department of Rural Economy (Eral) of the Department of Agriculture of the State of Paraná (Seab) estimates that currently the stock of wheat must revolve around 900 000 tonnes, of which 2.9 million tons have already been sold. Last year, in the same period, there were only 100 thousand tons stockpiled for a sold volume of 1.7 million tons.
It is worth remembering that the Brazilian wheat consumption revolves around 12 million tonnes per year and the country produces around 7 million tons, being inevitable import. Often, buyers also opt for international wheat because climate problems as rains and frosts will reduce the quality of the Brazilian product.
However, the safra 2013/14 – record of 3.79 million tons in the State – is inviting to mills. The high volume stocked with sales potential may cause prices to gain breath from now on. The average of the quotations on the market available (negotiations between firms), there was high of 3.54% in Paraná, of 1.72% in Rio Grande do Sul and 0.36% in São Paulo. The 60-pound bag is $ 30.66 in the State.
The consultant expert in wheat Yields, Market & Élcio Benedict, emphasises that the high prices is a reality and there is no other way for mills to buy the product at higher prices. "The scenario of recovery in prices is justified, since there is little wheat in MERCOSUR countries and the dollar is high, making the purchase on international markets."
Benedict said that those domestic producers that are able to fight on equal terms with the imported wheat may have good profitability in this moment of currency fluctuation.
International
In the international market, wheat futures contracts traded in the two North American stock exchanges operated in high for most of last week. The increase resulted from the monthly supply-and-demand report from the USDA, which reduced world grain stocks slightly in comparison with the previous one, of 197.85 million tons for 197.71 billion tons. The dry weather in the Great Plains of the United States also contributed to the valuations. The data were collected by the Cepea.