Cheap wheat: why prices do not react even with compromised harvest?

Despite the slower pace of the harvest in southern Brazil, wheat prices continue to fall. According to data released by Cepea, the higher domestic supply and the competitiveness of imported product have sustained the downward trend. Frequent rains in the South, especially in Paraná, have delayed the wheat harvest and interrupted field activities, as pointed out by the latest bulletin from the Center for Advanced Studies in Applied Economics (Cepea). In a normal scenario, the limitation in supply could sustain or raise prices, but this has not been the case. According to Cepea, the explanation lies in the combination of structural and conjunctural factors. Among them, the high exchange rate stands out — with the dollar at around R$ 5.30 — and the greater competitiveness of imported wheat, which enters the Brazilian market with more attractive prices. In addition, the international scenario contributes to the decline in quotations. Projections indicate a possible record global crop, ...