European market
The wheat prices for May contract crossed yesterday the 200 €/t level on Euronext, closing at 203.50 €/t, returning to the highest point of the year already tested on April 20. The May contract is thus showing new important movements 3 days before its closing, disconnecting from the physical market. On the other contracts for H20, prices were unchanged at + 0.50 €/t.
From a climatic point of view, the thunderstorms are observed in Ukraine and southern Russia, easing water stress in the region, but also causing damage where they are too violent. The operators fear now the cold wave expected next week, especially in France at a sensitive stage of crop development.
The crude oil prices rose again yesterday at the start of the day before giving up some ground. The prices appear this morning at 24.20 $/b in New York. The euro is displayed at 1.0800 against the dollar.
Argentina is experiencing many difficulties in its exports, a consequence of the lack of dockers in the ports with the covid 19, but also internal logistical problems with river water levels too low to allow river transport.
On the international scene, South Korea purchased 138,000 t of corn from South America. Jordan is buying 120,000 t of wheat.
Morocco, which has suffered a drought in recent months, will see its 2020 harvest in sharp decline compared to last year. It will force the country to renew the decision to zero taxes on grain imports, unlike in previous years, where a 35% import tax was applied during the start of the campaign to allow producers to sell their products locally at decent prices.
In corn, Europe has increased its import tax mechanism in view of prices in the USA, the lowest in 10 years. These taxes are now displayed at 10.40 €/t against 5.27 €/t previously.
The rapeseed prices showed little progress yesterday waiting for the StatCan report with canola stocks and intentions in Canada published today.
American market
Yesterday in Chicago, the prices marked a decrease for all products in the context of possible new tensions between China and the USA. Trade tensions between the two countries overlap with the lack of global demand penalized by the health crisis.
Selling pressure was, however, partially offset by fears of frost damage in the USA, with a cold wave expected this weekend, which could impact wheat, but also recently sown corn.
The funds were net sellers yesterday for 9,500 lots of corn, 4,500 lots of soybeans and 2,500 lots of wheat.
Black Sea market
Forward prices for the 2020 wheat crop in Ukraine have shown some stability in recent weeks. For harvest delivery, 11.5% wheat is proposed at 177 $/t, Odessa delivery. The discount for feed wheat continues to increase reaching -10 $/t. Indeed, the traders anticipate a higher proportion of feed quality this year in the Ukrainian harvest due to fears linked with a continuous drought in the southern regions. The protein premium, on the other hand, is particularly low, 12.5% wheat appearing at +1 $ vs 11.5% quality, for the forward contracts.
Barley prices are stable at 161 $/t while prices for 2020 corn are falling a little more each week to appear currently at 144 $/t for October delivery. A dozen of dollars should be added to these port prices to have their FOB equivalent.