European market
Yesterday was marked by big volatility of prices for all products, especially for rapeseed, with a variation for the latter of almost 10 €/t during the day of yesterday. These movements reflect the uncertainty that reigns among operators, divided between fundamentals remaining generally tense, and the consequences linked to the spread of the coronavirus.
Dockers' strikes are weighing more and more on French export activity, as illustrated by Tunisia's request to avoid loading from French ports. The additional cost linked to this demand is important, forcing our exporters to find alternatives. No doubt this subject will be discussed at Paris Grain Day this Friday.
The palm had a crazy day yesterday with a record drop of more than – 10 % followed this morning by an equally significant increase. These daily variations are historic, and it is necessary to go back more than 10 years to find such volatility. This movement in palm generated a large amplitude of rapeseed prices. In such contexts, option-based hedging strategies are necessary.
On the international scene, the call for tenders by Syria for 200,000 t of wheat, the origin of which can only be Russian, should be noted. The USA sold just over 124,000 t of corn to Mexico yesterday and Jordan purchased 60,000 t of hard quality wheat, optional origins. Saudi Arabia purchased 900,000 t of optional feed barley by at the end of last week, but you can almost certainly say that the main share fell on the Black Sea origin.
From a climatic point of view, beneficial rains are expected over southern Russia in the coming days.
American market
Volatility was also clearly visible in Chicago last night, with a slight drop in soybean prices, penalized by weak Chinese demand and the arrival of Brazilian origins.
Corn prices find support in high export activity, with 668,559 t shipped during the week of January 16 to 23, against 396,613 t the previous week.
The funds were net buyers yesterday for 21,000 lots of corn, and net sellers for 3,000 t of wheat and 3,000 t of soybeans.
Operators are still waiting for Chinese imports to materialize, purchases becoming more and more uncertain, in particular with demand which could fall due to the spread of the coronavirus.
Black Sea market
Despite a slow export pace, the Russian Ministry of Agriculture confirmed yesterday the export target at 46 Mt of cereals on this campaign, including 36 Mt of wheat. This figure raises questions when knowing that Russia has managed to shop for the moment only 26 Mt of cereals since the start of the season against 30.9 Mt over the same period last year.
Russian authorities’ export figure is 2 Mt higher than the USDA anticipates. This figure now appears unreachable. In barley also, in view of the bad shipment figures since the start of the season, local operators doubt to have export figures above 4 Mt when the USDA and the Ministry forecast them above 5 Mt.