Dollar and lower supply in Argentina will be decisive in 2021 for the wheat market

Brazilian agents are, at the beginning of 2021, paying attention to the main factors that influence foreign purchases, which are the availability of quality products in the Brazilian market, the external price of the cereal and the dollar. In the case of Argentina, the main supplier of wheat to Brazil, wheat values ​​are related to external parameters, but also to the country's own trade policies (the government may choose to restrict foreign sales) and tax policies.

As for the dollar, estimates from the Central Bank's Focus Bulletin indicate that the North American currency should remain above R$5,00 in 2021, which tends to keep imports more expensive. In the Brazilian market, with the slight increase in supply due to the completion of the harvest, prices normally weaken, considering that many need to free up warehouses for the summer harvest.

Despite this, domestic prices are still at high levels, the current supply of quality wheat is low, and some industries need to replenish stocks, which could keep external purchases strong.