European market
The markets are recovering a little thanks to good export activity, but also for technical reasons, with the testing of important support levels, both on Chicago and on Euronext. Volatility is still the most present on rapeseed, in the context of the palm strong rebound yesterday and this morning in Kuala Lumpur.
The spread of the coronavirus keeps everyone's mind, limiting the rebound potential, at least in the short term. It is mainly the Chinese economy which is penalized but which also influences the whole of the world economy.
The falling crude oil prices make producing countries react, in particular, members of OPEC, who are thinking to reduce their production quota again to support prices.
The palm prices rise sharply, notably thanks to comments from Pakistan willing to increase its purchases from Malaysia, to compensate at least partially for the fall in purchases from India.
The European Union has exported to date just over 16 Mt of wheat, a little bit more than half of its target for the season. Origin France remains competitive on the international scene, despite the decline in prices in the Black Sea basin.
American market
A very slight increase was registered yesterday in all products on the American markets, mainly on technical considerations when approaching support levels. The equity markets rebounded in a context of a slight easing of fears linked to the coronavirus. US officials, however, point out that Chinese purchases promised during the January 15 deal may be delayed due to the epidemic.
Soybean prices find some support in the delay of soybean harvest in Brazil due to rains. However, production estimates remain high, at around 124 Mt. FC Stone posted yesterday an estimate for Brazil's corn harvest at 97.8 Mt, with 25.9 Mt for the first harvest and 71.9 Mt for the second, the one following soybean crop.
Yesterday the funds were net buyers for 9,000 lots of corn and 3,000 lots of soybeans. They were neutral in wheat.
Black Sea market
The prices of Russian wheat FOB Novorossiysk have been the world market driver since the beginning of September. But the decline started at the end of January continues. In fact, since its highest point of January 26, the FOB price of Russian wheat has lost 7 $/t, while the closest contract on Euronext has lost 10 $/t at the same time. Following the last GASC tender during which the Russian origins were not chosen, Russia is looking for more competitiveness. Indeed, more than 13 Mt of wheat remains to be exported to reach the export target of 34 Mt.
Corn prices are also sensitive to the decline in wheat prices, even to a lesser extent. Thus, Ukrainian corn fell by -3 $ in port delivery from the highest.
In Ukraine as in Russia, there are many producers who postpone sales for the remaining stocks, hoping that the recent devaluation of local currencies will continue in the coming weeks.