European market
Few evolutions on cereals markets yesterday as traders await the USDA report of this Thursday to get more elements about the next crop. Cooler temperatures in the north of Europe will slowdown the beginning of harvests and avoid the end of cycle scalding risk caused by too high temperatures.
The business on the physical market remains calm. Buyers are betting on lower prices soon due to the harvest pressure. Nevertheless, last week, wheat prices for the 2020’s crop increased, especially in Ukraine.
On the foreign currencies market, the Euro remains steady vs. Dollar at 1.1290. The crude oil is retreating slightly close to the psychological threshold of 40 $/b on the WTI.
Coceral cut its estimation of soft wheat production in the EU (including UK) to 129.7 Mt vs 135.4 Mt estimated last month and 146.8 Mt last year. The barley production is revised up to 63.4 Mt vs 61.5 Mt seen last month. Same scenario for the corn, the output is estimated at 66.8 Mt vs 65.5 Mt. The rapeseed crop is lowered to 16.5 Mt vs. 17 Mt.
The rapeseed was firm yesterday in the wake of the palm and crude oil, but the canola was losing ground. European imports on June 7 and for the current crop are amounting to 5.66 mt vs. 3.94 Mt last year to date.
American market
US markets retreated on all products yesterday; a favorable weather for both soybean and corn is easing the risk premium. The USDA is seeing the corn and soybean crop ratings at respectively 75% and 71% of good to excellent, one point higher than last week for both crops. Corn and soybean plantings are respectively 97% and 87% achieved.
The corn is finding some support with the very short position of the funds, suggesting the possibility for these players to buy back their positions in case of climatic degradation. The soybean is benefitting from a good US export momentum, especially toward China. These elements are limiting the bearish potential of a very large US production in 2020.
The wheat is slightly lower with the soon harvest pressure. The wheat harvest in the US is 7% done so far, a bit under market’s expectations.
Yesterday, funds were net sellers in 4 000 lots of soybean and 4 000 lots of wheat. They were net buyers in 8 500 lots of corn.
Black Sea market
Thanks to the Ukrainian success at the last Egyptian GASC tender, wheat prices of the next crop recorded some gains during recent days.
The 12.5% milling wheat of the next crop is dealing above 190 $/t port delivery. The 11.5% wheat is dealing at 188 $/t. The discount for the feed quality is widening to reach 13 $/t. Barley prices for delivery crop returns to season highs at 165 $/t. The corn is dealing at 147 $/t, delivered Odessa, crop delivery.
The rapeseed is displayed at 410 $/t. The first forward prices for the sunflower are showing the sun seed price at an equivalent of 385-390 $/t, delivery pre-port crushing unit, 20% VAT included.