Poor weather conditions and increased demand due to the epidemic have resulted in many agricultural products such as corn, soybeans and wheat registering historic price increases; Moreover, some minerals such as copper also suffer from these fluctuations.
During the past week, the price of corn reached a maximum of $ 6.84 a bushel (about 25 kilograms), a level not seen since March 28, 2013, while the price of soybeans reached a maximum of $ 15.74 a bushel, its highest level since October 26. , 2012. While the maximum wheat level reached 7.69 dollars, the highest increase since February 2013.
“Going forward, grain prices are expected to trade based on weather conditions and news related to demand. In this context, corn is expected to trade during the month of May in a range between $ 6.32 and $ 7.21 a bushel, while wheat can trade in a channel ranging from Between $ 6.88 and $ 8.15 a bushel, “predicted Gabriela Seeler, director of economic analysis and BASE. Bank account statement.
One of the factors that affected the prices of these basic foods the most in agribusiness is the meteorological phenomenon called “La Niña”, because it causes fluctuations in the atmosphere that cause water shortages in some places and floods in others. La Niña has already made its mark this year in North and South America.
The north is dry
Meanwhile, the prospect of a drought in the United States, a major producer of these grains, is shaking commodity markets.
Consequently, the outlook for the United States is particularly bleak, with more than 48 percent of states in this country affected by some level of drought.
“The drought has been long enough, and it will take a few years for the reservoirs to get back where they should be,” Dale Moehler, an AccuWeather meteorologist, told Bloomberg.
Projections indicate that there will be almost no rain in major production areas in the US during the month of May, “I don’t see any hope for a significant improvement over the next three weeks and they will be under pressure for the rest of the season,” Don Kenny said in a separate interview. , Agrometeorologist at Maxar Technologies.
As if that weren’t enough, declining revenues and increasing demand from China lead to a massive rise in food prices, which ends up affecting inflation. In Mexico, this indicator reached 6.05 percent at an annual rate, a level not seen since December 2017, and the high prices of these products were reflected in many foods, including tortillas.
The light at the end of the tunnel is not near. According to a report by Goldman Sachs, raw materials will rise 13.5 percent in the next six months amid an unprecedented recovery in global oil demand, while copper will reach record levels.
In particular, copper surpassed $ 10,000 per metric ton, a level reached for the first time since 2011, approaching an all-time high that year, as economies that fuel demand recovered and mines struggled to keep up.
“The price of copper has become high and is likely to go further,” said Robert Edwards. “It is a boon to the mining companies, which are currently earning at least $ 2 for every dollar they spend extracting minerals from the ground.” Principal Minerals Analyst at CRU Group.
With information from Bloomberg.