European market

A sharp rise in wheat prices was registered yesterday in a context where the estimate of the 2020 harvest in France is revised downwards. This revision is linked to the decrease in areas by - 200,000 ha posted by the ministry before yesterday at 4.4 Mha. This would lead to a downward revision of 1 Mt, which now gives an estimated total production of 31.3 Mt. This is well below last year's figure of over 39 Mt. In this context, FranceAgriMer's exports to third countries for the 2020/2021 marketing year are displayed at 7.75 Mt, well below the previous year's figure of 13.6 Mt. The stock at June 2021 is now estimated at 2.6 Mt, compared with a stock at the start of the campaign today at 3.0 Mt.

In barley, all varieties combined, stocks at the end of the 2020/2021 marketing year have been revised upwards to 2.1 Mt, compared to 1.6 Mt at the start of the marketing year, as a result of the fall in demand erasing the decrease in the 2020 harvest estimation.

From a climatic point of view, the north of France and Europe has rains which are penalizing harvest progression. The rest of France is benefiting from milder weather, allowing the field works to advance rapidly with the first wheat cuts. The results confirm a great heterogeneity in terms of yields, but with good quality.

In Argentina, the lack of water during the sowing period led to a downward revision of the planted area of around - 400 000 ha according to the Rosario stock exchange. This would then lead to a downward revision of production to 18/19 Mt against the previously estimated 21/22 Mt.

On the international scene, activity remains weak. However, there is a tender by Jordan for 120 000 t of milling wheat and by the Philippines for 110 000 t of feed wheat.

Rapeseed continues to grow in the wake of crude oil, which this morning stands at 40.80 $/barrel. The euro also rose to 1.1350 this morning against the dollar.

American market

Chicago prices rose sharply yesterday against a backdrop of buybacks following the downward revision of production in France, but also fears that production in Argentina will fall due to sowing difficulties linked to the water deficit. In this context, the balance sheets of the 8 largest exporting countries are tightening but demand remains unknown. The impact of the covid-19 on demand is certain but remains very difficult to measure.

Funds were net buyers yesterday in wheat for 15,000 lots and in corn for 10,000 lots. They were net sellers in soybeans for 4,500 lots.

Soybeans were down yesterday in Chicago with still an important 9 $/bu resistance level.

Traders will continue to adjust their positions today ahead of tomorrow's USDA report. 

In Brazil, the Conab revised its soybean production estimate to 120.9 Mt and corn production estimate to 100.6 Mt.

Black Sea market

The harvest pace is behind last season in the Black Sea basin. In Ukraine, at the end of last week, 289 000 ha of barley and 110 000 ha of wheat had been harvested compared to 1 012 000 ha and 750 000 ha respectively last year. Stormy rains last week in the southern regions deepened this delay. Yields show better results on barley as harvest progresses. In wheat, the average yield at the start of the harvest is 50% lower than the first yields in 2019. The figures published this Friday will certainly bring more positive elements.

In Russia, the delay is also registered, especially in wheat with less than 3 Mha harvested against 4.5-5 Mha last year. The average yield is rising rapidly with the cuts, despite the fact that it is down -20% compared to last year for the same harvested area.