European market
The markets were hesitant yesterday, especially on wheat, suffering on the one hand from the downward pressure from Chicago, and on the other hand, integrating good competitiveness of the French origins on the international scene on the basis of the current price levels.
Egypt is taking advantage of this downturn to launch a call for tenders for wheat for loading period on 25 July / 5 August. It will be interesting once again to follow the price levels that will be retained and to see what price difference is displayed between the French offers, if any, and those of the Black Sea.
On the international scene, activity is relatively calm, with Taiwan buying 65 000 t of corn from Brazil and Thailand buying 60 000 t of feed wheat from the optional origin. A tender from Ethiopia was issued for 400,000 t of milling wheat. The country has suffered not only from drought this year but also from locust attacks.
As for currencies, the euro seems to be stabilizing at 1.1240 against the dollar this morning. Same for the crude oil posted this morning on New York at 37.40 $/barrel.
As harvest pressure is coming on the markets, Russia has decided not to set export quotas for the first part of the marketing year, until December, but intends to do so for the period January/June 2021.
The Association of German Co-operatives estimates future wheat production at 22.21 Mt, down 3.7% from last year as a result of this spring's drought. Rapeseed production is estimated to have increased by 13.3% to 3.2 Mt and feed barley production is estimated to have fallen by 5.2% to 9.25 Mt.
Rapeseed prices gave up ground yesterday, while canola showed some firmness in the face of weather adversity in Canada, mostly in the west.
American market
Harvest pressure continues its effect on Chicago wheat, with prices at their lowest level since last October, while the American origins are very competitive. By crossing the psychological support level of the 5 $/bu this week, the funds accentuated the chartists’ sales pressure.
Corn is finding some support in the weather market, with very high temperatures, especially on the eastern side of the Corn Belt as the crucial flowering period approaches. In addition, ethanol production is up to 841,000 barrels per day and stocks are down to 21.35 M barrels.
Soybeans continue to benefit from purchases from China, despite tensions between the two countries.
Funds were net buyers yesterday for 6,000 lots of corn and 6,000 lots of soybeans. They were net sellers for 6,500 lots of wheat.
Black Sea market
In Ukraine, harvesting is gaining ground. After the southern regions, the first barley cuts continue in the center of the country. In the southernmost parts of Ukraine, farmers are just beginning wheat harvest.
With the start of fieldwork, new crop supply is arriving in the ports, which negatively affects price dynamics. In a few days, barley lost 3-4 $ to trade now at 163-165 $/t CPT. The same trend is observed for wheat 11.5% which decreased by -3-5 $/week to184-187 $/t CPT. The feed wheat prices evolved little still displayed in the wide range of 173-179 $/t CPT.