European market

The USDA report did not bring a lot of surprises. The global wheat stock is thus displayed for the end of the season at 288.03 Mt, slightly above operators' expectations. The ending stock in the 8 main exporting countries is, however, revised to 57.97 Mt against 59.41 Mt estimated last month. This did not prevent the prices from dropping at the end of the day, especially after the disappointment of the Egyptian tender which retained 3 Romanian and 3 Russian boats. This was not a surprise as the competition appeared to be tougher with the Black Sea origins. The prices of the latter have declined in the last two weeks. In addition, exports from France remain strong towards other destinations, that’s why the country was not particularly aggressive on this destination.

Algeria purchased around 660,000 t of optional wheat, much of which is expected to be from France. The USDA report shows EU exports towards third countries at 32 Mt, against 31 Mt estimated last month.

Yesterday the agriculture ministry estimated the winter wheat area at 4.70 Mha, down by -5.6% from the previous year. This is still higher than the latest estimates from traders. In winter barley, the estimated area is at 1.31 Mha, close to the figure of last year. In rapeseed, winter areas are estimated at 1.08 Mha, down by -2.1% from the previous year.

The coronavirus epidemic continues to do damage, with officially more than 1,000 deaths reported in China, causing an economic slowdown in the country.

Rapeseed prices were still losing ground yesterday, in the wake of the palm, which exports are falling, both for economic and geopolitical reasons.

American market

Wheat prices fell sharply in Chicago yesterday, even if the USDA report did not particularly bring surprises for this product. The funds, unusually long on wheat, have sold many lots, in the absence of new elements.

Conab in Brazil has estimated the country’s soybean production at 123.25 Mt compared to 122.23 Mt estimated last month and 115.03 Mt last year. In corn, the production 2020 is estimated at 100.49 Mt compared to 98.71 Mt estimated last month and 100.04 Mt last year.

Details of the country-by-country production estimates posted by the USDA are available on request.

The funds were net sellers yesterday for 10,000 lots of wheat and 10,500 lots of corn. They were net buyers for 500 lots of soybeans.

Black Sea market

Ukrainian operators continue to invest in infrastructure to support continued growth in production. Thus, during 2019, the construction of silos increased the certified national storage capacity by more than 3 Mt to bring the total figure to 51 Mt. Among the 1,250 silos identified in the country, more than 100 of them offer a storage capacity of more than 100,000 t. At the same time, investments also relate to logistics capacities, notably through the purchase of wagons. More than half of the wagon fleet is now under the supervision of private structures, while their share was still almost negligible just 5 years ago. Also, under the impetus of Nibulon, river logistics took off with 3.5 Mt shipped to ports during the 2018/19 campaign, an increase of almost 50% compared to the previous year.

The shipment pace observed in ports since the start of the season shows the general improvement of infrastructure across the country.