European market
European markets on all-products were quite stable yesterday. The activity on physical markets is slowing down in the absence of significant demand on the international scene. This is combined with a reduced supply in France due to a sharply lower harvest compared to last year.
The heat wave is continuing, and will affect spring crops such as malting barley, corn and beet. On this last product, an amendment should be voted at the autumn by the French parliament to allow the use of neonicotinoids exclusively on seeds for two seasons. A strong aphid pressure this year has led to a significant development of the yellow virus in beet fields.
Dryness is also hitting a large part of Argentina. Wheat planting is ending for a harvest in December. Considering the water deficit, the area sown will be lower than expected, and initial crop estimates are below 20 Mt. At the opposite, weather conditions remain very favourable in Australia, leading to a probable sharp increase in production compared to previous years. Estimations are ranging between 25 and 30 Mt.
On the international scene, China bought 126 000 t of soybeans from the US. Japan, South Korea and Pakistan are buying wheat in small volumes.
FranceAgrimer confirms a good wheat quality for the 2020's harvest. Protein content is above 11.5% and specific weight between 79 and 80 kg/hl.
Rapeseed prices were unchanged yesterday. The market is still supported by the palm but slightly penalized by the soybean. According to FranceAgrimer, the oil content of the French crop should be around 44% on average.
The euro has retreated from yesterday’s highs and is dealing around 1.1830 this morning against USD. The crude oil remains steady at 41.80 USD/barrel on the US market.
American market
Yesterday, wheat prices continued to decline in Chicago, prices are now close to the psychological threshold of $ 5/bushel. The weekly export sales have been released at 605,500 t in line with expectations.
Soybean prices fell for the third day in a row. Good crop conditions are suggesting a near record crop in the US for this season. Weekly exports amounted to 1.75 Mt, at the top end of the expectations’ range.
Yesterday, funds were net sellers in 7,000 lots of wheat and 2,000 lots of soybeans. They were neutral in corn.
This morning in pre-opening, the wheat is rebounding slightly close to the key level of $ 5/bushel, while soybeans and corn are virtually unchanged.
Black Sea market
By this end of week, wheat prices on the Ukrainian physical market continue to decline. Yesterday, on a delivered basis, the milling wheat lost $ 2/t to $ 190/t. For the week, the decline amounts to $ -4/t, like on the Russian wheat FOB Novorossiysk. The feed wheat is more resilient to this bearish pressure, as a sign of the good quality level of the Black Sea production this year.
Barley is particularly firm at $ 174/t on port delivered basis, as is rapeseed, which is dealing on a new high since the start of the campaign at $ 430/t, Odessa basis. This is the highest level reached for last 5 seasons.
On a forward basis, the corn remains stable at $ 153/t, port delivered.