European market
Prices have increased significantly yesterday on European markets, especially the wheat due to the French export success toward Egypt, even if this deal was limited to 60 000 t. The fact to be able to export to this destination is interpreted as a positive factor for the French origin on the international stage. To reach 20 Mt of exports toward the intra-community market and third countries, a good level of competitiveness will be needed all along the marketing year. This will avoid recording a too large stock by the end of season.
Some shipments toward Morocco have been also noticed as the country has lowered its import tariffs from the 1st of October from 135% to 35%.
In other part of the world, we can note the sale of 257 000 t of US soybean to China, despite import taxes. Japan has bought 122 000 t of milling wheat sourced from USA and Canada. In Canada, rains are persisting and are degrading the spring wheat quality.
Saudi Arabia has launched a feed barley tender exceeding 1 Mt. The competition will be stiff between French, Black Sea and Argentinian origins. French operators are hoping that French barley will be bought by this major actor to alleviate the stocks.
IGC has left its estimation for the world production of wheat unchanged at 764 Mt and cut the output of corn by -1 Mt to 1 099 Mt.
The rapeseed was benefitting from the good orientation of the palm which is fading this morning in Kuala Lumpur.
The euro is losing some more ground versus the dollar and is dealing under 1.0920 this morning. The crude oil remains steady at 56.20 $/b on the WTI.
American market
Good performance of the wheat yesterday in Chicago thanks to short covering. The corn and soybean were little changed.
Weekly corn export sales were disappointing with 494 000 t vs expectations included between 600 000 t and 1.1 Mt. For the soybean, they were in line with anticipations at 1.038 Mt. For the wheat they were in the bottom range of expectations at 286 589 t.
Funds were net sellers in 7 500 lots of corn, 2 500 lots of soybean, they were net buyers in 5 000 lots of wheat.
US traders remain focused on the return of China to buy US soybean and on the excessive rains hitting the northern US plains. They are degrading the quality of spring crops.
Black Sea market
During the week, a 140 000 tonnes new grain terminal has been inaugurated in Nikolayev. It has been built by POSCO and OREXIM. This new facility comes after the recent opening of another new terminal in Youjnyy in order to reach 4.5 Mt of loading capacity per year. So, Ukraine could be very soon able to increase its monthly capacity of all-grains and oilseeds’ shipment to a record high, close to 6 Mt. These improved facilities in ports will increase the pressure to bring cereals from the fields to the ports. The government is intending to reform the rail system toward privatization in 2020. This could give access to private trains on the rail network. Such measures could significantly smooth out the transport conditions and the logistic issues in the country.