European market

Choppy session yesterday for all products. Profit takings provoked by the fears of economic slowdown due to the coronavirus effects have weakened most of commodities markets.

The highest level of volatility has been recorded on the rapeseed and on the palm. In Kuala Lumpur, palm prices plunged after a long weekend. By mid-session, the palm was 180 ringgits/t down. Beyond a slowdown of the demand caused by sanitary risks in Asia, the degraded relations between Malaysia and India are also weighing on prices.

In this uncertain environment, stock markets erased all gains recorded from the start of the year along with the crude oil and the Chinese yuan.

On the international stage, Saudi Arabia bought 900 000 t of feed barley at an average price of 224.45 $/t CIF. Origins are optional; they will probably be various and include European origins. We can note also the sales of 110 000 t of US corn to Japan and of 150 000 t of Australian wheat to China.

On a weather point of view, temperatures are still above seasonal in Black Sea, pushing to an advanced vegetative development of the crops.

American market

Main agricultural products quoted in Chicago dropped yesterday even if the wheat managed to close at its highest level of the session. Traders are puzzled between risks of an economic downturn and high wheat prices in place in the Black Sea region.

Export inspections in wheat amounted to 223 994 t vs 516 309 t last week and were below traders’ expectations. In corn, they were in line with anticipations at 668 559 t as in soybean at 1.039 Mt.

Yesterday, funds were net sellers in 16 000 lots of corn, 6 000 lots of soybean and 4 000 lots of wheat.

Soybean harvests are progressing in Brazil. Due to late plantings, the works are advanced to 4.3% today vs 13% last year to date. Yields are satisfactory so far.

Black Sea market

Russian farm stocks in wheat on Jan.1 were about +10% above the level of last year to date. The sharp slowdown of the sales by the producers in November and December has been mainly caused by the revaluation of the ruble vs dollar. The low level of sales has reduced the shipments’ momentum which is usually observed at this period of the year. By the end of January, Russia will have exported less than 22 Mt of wheat vs 27 Mt at the same period of last year.

The ample supply available until the end of the campaign should refrain Russian FOB prices to deal well above current levels.