European market

Market was quiet yesterday despite the Egyptian tender and the USDA report.

Egypt bought 355 000 t of wheat including 120 000 t of French. Origins were distributed as follow:

• 60 000 t of Ukrainian at 237.47 $ CIF (222.50 $/fFOB plus 14.97$ of freight)
• 60 000 t of Romanian at 238.25 $ CIF (224.70 $/FOB plus 13.55 $ of freight)
• 55 000 t of Russian at 238.35 $/CIF (223.00 $/FOB plus 15.35 $ of freight)
• 120 000 t of French at 238.34 $/CIF (220.30 $/FOB plus 18.04 $ of freight)
• 60 000 t of Russian at 238.40 $/CIF (223.91 $/FOB plus 14.49 $ of freight)

The French Minister of Agriculture said that winter crops acreage should be as follow:

• Soft wheat: 4.729 M ha or -4.8% compared to last year due to heavy rains this autumn. This is a decline of -5.6% from the 5-year average
• Winter barley: 1.25 M ha or -4.3% compared to last year. This a decline of -9.2% from the 5-year average
• Durum wheat: 225 000 ha or -7.5% compared to last year. This is decline of -31.7% from the 5-year average
• Winter rapeseed: 1.049 M ha or -4.9% compared to last year. This is a decline of -26.8% from the 5-year average

Rainfalls continue from the start of the month, especially in coastal regions, amplifying the problems.

The rapeseed retreated a bit yesterday like the palm. For this last product, stocks figures were down and beyond traders’ anticipations. Crude oil prices dropped due to higher stocks in USA.

American market

USDA said that corn world stocks are estimated at 300.56 Mt vs 295.96 Mt seen last month. US wheat inventories are estimated at 974 M bushels down from last month (1 014 M bushels), it would be the lowest stocks in USA seen since 2015. However, the US wheat is still uncompetitive on the international stage compared to Argentinian or Black Sea origins. At world level, end of season wheat stocks are forecasted at 289.5 Mt vs 286.18 Mt expected by the traders before the publication of the report.

Among the most marking elements of the report, we can note the increase of the corn production in China displayed at 260.77 Mt which is an increase of +6.77 Mt compared to last month estimates.

Unsurprisingly, the business was subdued after the report both from commercial and funds. The financial funds were net buyers in 3 500 lots of corn, 4 500 lots of soybean and 3 000 lots of wheat.

Trade discussions between USA and China are still at the center of concerns a few days ahead of the possible implementation of new tariffs from USA on Chinese goods.

Black Sea market

The strength of palm oil prices is underpinning the sun oil in Ukraine. Prices have surged by +6% from the beginning of the month to deal at 740 $/t FOB in Ukrainian ports. According to local operators, sun oil prices should continue to increase despite a strong harvest pressure.

In this context, crushers that must have enough stocks for next three to four months are largely contributing to this upward trend.