European market
Another day of rise for the cereals market still caused by a strong international demand and supply problems.
On the international stage, Algeria is seeking wheat ahead of its planned schedule. The North African country is a regular customer for French origins. Saudi Arabia bought a bigger volume of feed barley than expected. 1.2 Mt of optional origins have been purchased by the kingdom while traders were expecting a volume of 750 000 t.
In milling wheat, a higher consumption of bread is fuelling the bullish trend. The demand from millers is up, as they want to secure their supplies.
According MARS, the European crop monitoring service, wheat yields could drop by -2.1% in the EU at 5.88 t/ha vs 6.01 t/ha in 2019. Winter barley yields are seen at 4.85 t/ha, down by -2.8% from last year. Only rapeseed yields are estimated above last season at 3.18 t/ha. On March 22, the EU has exported 23.21 Mt of soft wheat vs 13.50 Mt last year to date.
Some confusion was reigning yesterday in Russia about possible restrictions on agro-food exports. In a first step, it was interpreted as possible limits on cereals’ exports, but for the time being no decision has been taken. This is true that the recent fall of the rubble vs dollar has pushed to inflation on commodities.
The rapeseed did not evolve a lot yesterday; the trend remains mixed with low prices on crude oil but a progression of soybean.
The euro is rising a bit this morning at 1.0780 vs dollar and the crude oil is dealing around 24.30 $/b in NY.
American market
Sharp rise of wheat and soybean prices in Chicago yesterday.
In wheat, a strong demand in bakery products is underpinning prices and in soybean, the market is boosted by higher needs from the animal feed sector.
On its side, the corn market remains mixed and penalized by the ethanol sector gloom.
Now, the US is experiencing a quick spreading of the coronavirus with strong economic damages to expect.
Yesterday, funds were net buyers in 12 000 lots of wheat, 12 000 lots of soybean. They were net sellers in 3 500 lots of corn.
Black Sea market
Black Sea wheat prices are progressing significantly in FOB, CPT or EXW-farm basis due to the rally observed both on Euronext and in Chicago. Very likely this morning, exporters will revise their prices up. However, the wheat FOB Novorossisk is dealing at 205 $/t, still 30 $/t under its highest levels recorded around mid-Jan.
Now, Black Sea origins are showing an increased competitiveness with European origins, estimated at 10 $/t FOB basis and are well positioned on the international market.