Forecasts for extended periods of dry weather in Argentina over the coming months sent soya bean prices higher over the last week. Markets are betting that the forecast period of dry weather in Argentina will negatively affect soya bean production.

The USDA has forecast Argentine soya bean production for the 2017/18 season at 56m tonnes. If the forecast dry spell materialises, markets believe production could be lower than the USDA estimate by as much as 4m tonnes.

Europe

Wheat prices have also risen in recent days amid concerns of severely cold weather in Russia and its effect on winter wheat crops. On the back of this concern, the price of May delivered wheat rose slightly over the last week close to €159/t on the Euronext exchange in Paris.

European maize prices were flat at €159/t, while oilseed rape prices were firm at just under €350/t.

Chicago

In the US, dry spells of weather across the grain belt, coupled with the emerging weather picture in South America, are boosting prices.

The price of May-delivered winter wheat from the Chicago exchange has shot up $4/t over the last week to more than $161/t (€131/t), while corn prices have gained almost $3/t over the last week of trade to hit $142/t (€116/t).

However, the big mover in the last week has been the market for soybeans with Chicago prices increasing $7/t to reach $366/t (€298/t).