European market
The result of the GASC tender is unsurprisingly showed the competitiveness of Black Sea origins at this time of year. However, yesterday's prices are up compared to the results of the previous week's call for tenders. In spite of everything, Egypt bought more volume than in the last tender with 470,000 t purchased, with 350,000 t of Russian origin and 120,000 t from Ukraine. The FOB prices were above 215 $/t. The drop in freight prices, however, partly compensated for the rise in wheat prices, situating CIF prices in Egypt between 228/229 $/t. This result deepened a still significant price spread between European and Black Sea origins, in a context of penalizing strength of the euro.
The prospects of reduced export availability in a context of declining French and European production mean that prices will have to be adjusted, especially on the domestic market. Despite a fall in prices on the futures market, operators note a different local situation. On Euronext, wheat prices are back to their lowest level since the beginning of July and are testing the short-term support levels.
In oilseeds, the drop in production in Europe supports prices. It should be noted that the August 2020 contract on Euronext, which has been marking strong daily amplitude since the beginning of the week, expires this weekend. The correction of palm oil in Malaysia observed since the beginning of the week seems to have little effect on the European market.
American market
All products marked a decline in Chicago yesterday, after the publication of the new crop rating results. The improvement in crop conditions for corn and soybean weighs on prices. Corn prices for the 2020 harvest have thus returned to the lows of July. The December 2020 contract is now trying to stabilize above 3.30 $/b.
The downward trend is also seen in soybeans. The observed declines in soybean oil and soymeal prices dragged soybean prices below the 9 $/bu level.
The advance of the spring wheat harvest could bring some support to the market. Prices are evolving above support levels in the context of first yield results which are lower than last year.
Black Sea market
Yesterday, during the seventh tender for the new season, the Egyptian national buyer purchased 470,000 t of wheat, by far the largest volume contracted for the 2020/21 MY. The average price was 228.5 $/t, which is 2.5 $ higher than in the previous tender. This price also marks a new high for Egypt since the launch of the season.
350 000 t of Russian wheat and 120 000 t of Ukrainian wheat were retained. Note that no Romanian or French origin was proposed, due to a lack of competitiveness.