European market
Following the fragile interim agreement concluded between USA and China on the trade, Argentina is now at the center of concerns. As feared by Argentinian farmers or anticipated by many analysts, the new Argentinian government has decided to raise export taxes. Soybean exports are now taxed at 30% vs 24.7% previously. Those of wheat and corn are increasing to 12% from 6.7%. This decision is bringing a supportive factor to prices, especially on oilseeds already boosted by the strength of crude oil after OPEC’s decision to reduce the output in Q1 2020.
On the international market, Tunisia bought 92 000 t of soft wheat, 125 000 t of durum wheat and 50 000 t of feed barley. Origins are optional, but French ones could be among those retained. South Korea on its side bought 60 000 t of corn.
Continuous rainfall is raising fears for the next season in France. Also, current strikes are penalizing the flow of goods. The real impact is difficult to appreciate so far.
Palm prices have resumed with their bullish trend and along with canola’s trend, it brings a positive momentum for the rapeseed which is testing again recent highs.
The Eurodollar is slightly down this morning at 1.1130.
American market
Soybean is the biggest winner of the partial trade deal agreed between US and China. Moreover, the oilseed market is benefitting from the new policy of the Argentinian government to increase export taxes. Soybean from Argentina is now taxed at 30% instead of 24.7%.
After the trade deal, China would have committed to buy between 40 to 50 billion $ of agricultural products from the US. This number must be compared to the level recorded in 2017 of 24 billion $.
The market benefited also from a decent level of US weekly export sales, above expectations: 502 700 t of wheat, 873 500 t of corn and 1 050 Mt of soybean.
Last Friday, funds were net buyers in 13 000 lots of corn, 10 500 lots of soybean and 3 000 lots of wheat.
USDA said in Sunday that soybean harvests are now completed in USA while those of corn are achieved up to 92% vs 89% in the previous week or 100 % on the 5-year average to date.
Black Sea market
According the data from the Ukrainian Ag Ministry, plantings of winter crops are now completed. After last adjustments, the official acreage is close to 7 Mha or 96% of the target. This decline is mainly concerning the winter wheat hit by unfavorable weather conditions during autumn. Ukraine has experienced a shortage of precipitations, high temperatures and dry winds provoking a dewatering of soils. According the local hydrometeorological center, the level of soil moisture in most of regions is one of lowest for these last ten years and comparable to 2015’s levels.
Harvest are also achieved with ample supply of corn and sunflower. On December 13, 35.2 Mt of corn were collected, or 99% of the target. 100% of sunflower surfaces were cut and 14.6 Mt produced.