European market
The markets are still evolving little, shared between a rather well supplied global balance sheet, and Chinese demand causing large movements on the bases, in an often narrow market context. Thus, the basis variations on feed barley are relatively significant, even if the volumes of transactions are small.
Agritel yesterday published its estimate of corn production in Ukraine, following the crop tour in the last week of August, at 33.5 Mt, down by 6.5% from last year and well below the USDA's estimate, as a result of the drought in recent weeks.
In France, the rainfall deficit persists in a significant way, penalizing farmers and impacting rapeseed production.
On the international scene, China once again bought 664,000 t of soybeans from the USA, which also sold 101,600 t of corn to an undisclosed destination.
Rapeseed prices are not changing much, while canola is at its highest level for the last 2 years and palm prices are also firm, progressing in the wake of other vegetable oils. Note that crude oil continues its decline to 36.3 $/b this morning. The euro moved little, trading at 1.1780 against the dollar.
In Argentina, beneficial rains have finally arrived, limiting the damage to the future wheat crop and favouring the future corn plantings.
American market
Chicago soybean and corn prices rose again yesterday, in a context of export activity supported by Chinese demand. Wheat, on the contrary, decreased, breaking the support level of 5.50 $/bu on December contract. In addition, Argentina is receiving beneficial end-of-cycle rains, while Australia is expecting a very good harvest to come, nearly double that of last year.
Yesterday's crop rating was roughly in line with traders' expectations, with corn rated as “good to excellent” at 61%, down 1 point from last week, and soybeans at 64% down 2 points.
The market may lose some ground today on profit-taking ahead of Friday's USDA report.
Funds were net buyers for 10,500 lots of corn and 6,000 lots of soybeans. They were net sellers for 6,000 lots of wheat.
Black Sea market
Russian producers are slowing down their winter planting pace. While the figures as of September 1 showed higher progress than last year, now a slight delay is appearing. Rainfall has been scarce or even absent during the last month. The surface moisture of the soil is strongly affected. The weather forecast shows no rain for the next 15 days, not allowing to accelerate the sowing process. In Ukraine, the situation is similar even if no figures are yet shared by the authorities.
This situation will have to be followed closely by the end of the month knowing that 19 Mha of winter crops planned to be sown in Russia could be questioned (vs 18.2 Mha in 2019 and 17.6 Mha in 2018).