European market
The French Ministry of Agriculture released its new crop estimates yesterday. In wheat, the French production is under 30 Mt, confirming Agritel's estimates published last week, with a yield of 6.83 t/ha. Combined with the Ministry's acreage prediction of 4,349 M ha, this gives a production of 29.71 Mt, close to Agritel's estimation of 29.2 Mt. In barley, the French production is seen at 11.30 Mt, down by -17.8% from last year. The 2020’s rapeseed crop is estimated at just 3.33 Mt, down by - 4.8% compared to 2019-20. It should be noted, however, that this represents a drop of -35.7% compared to the average of recent years. Finally, in corn, the ministry is expecting a production of 14.4 Mt. This figure could, in our opinion, be revised downwards considering the impact of current weather conditions.
On Euronext, wheat prices are testing their support zone at 180 €/t in a context of upward revision of the production in Russia, Canada and Australia. The European origin remains penalized by the strength of the Euro against the dollar. This morning the single currency is dealing just below 1.19 vs. USD.
Unsurprisingly yesterday, Egypt bought 410 000 t of Black Sea wheat, split into 295 000 t of Russian origin and 115 000 t of Ukrainian. USA managed again to sell 192,000 t of soybean to China.
Yesterday, the rapeseed retreated on Euronext, despite a falling 2020 harvest in Europe. Canola prices in Winnipeg are under pressure. According to Farmlink, Canada's all-wheat production this year could reach a record high level at 38.9 Mt, including 7 Mt of durum wheat and 31.9 Mt of soft wheat. The Canadian canola production is estimated at 20.2 Mt compared to 18.6 Mt last year.
American market
Little change in Chicago yesterday, but the overall sentiment remains bearish due to favorable U.S. weather conditions, suggesting ample corn and soybean crops to come.
The soybean is benefiting from the firmness of prices in Brazil. The US export activity, especially the flows toward China, remains well below the targets set at the time of the agreement signed between the two states last January.
For the corn, the weekly US ethanol production amounted to 274 million gallons, compared to 285 million the previous week.
Yesterday, funds were net buyers for 7,500 lots of corn and 2,000 lots of wheat. They were net sellers of 3,500 lots of soybeans.
Black Sea market
Less than 10 days after a previous tender, the Egyptian state buyer purchased more than 400,000 t of wheat yesterday. Specifically, the GASC bought 410,000 t, including 295,000 t sourced from Russia and 115,000 tons from Ukraine. The average FOB basis price is of 212.8 USD/t, i.e. -2.6 USD/t below the average price contracted in the previous tender.
Yesterday, on the physical Black Sea wheat market, prices were down by -1 USD/t either on FOB, CPT or EXW basis. Since the beginning of the month, the FOB Novorossiysk has lost -4 USD/t and is now dealing at 206 USD/t for the 12.5% level of proteins.