Analysis 25/09/2020

European market

Most of markets plunged yesterday due to raising fears to see the world facing a second wave of Covid-19 pandemic. Oilseeds were the worst performers, the rapeseed plummeted up to -6 €/t on Euronext nearby deliveries.

Just before the weekend, the market could recover somewhat in the wake of crude oil that remains quite resilient above 40 $/b in NY. The Euro is stabilizing vs. Dollar and is dealing this morning at 1.1670.

On the international market, Japan bought about 86 000 t of milling wheat sourced from the US and Canada. China did not buy any US soybean yesterday after 14 consecutive days of daily purchases.

In Argentina, long-awaited rain is providing some relief to the crops after a long period of dryness. The Buenos Aires exchange is expecting that the next crop (from December) will amount to 17.5 Mt vs. 18.8 Mt last year. Corn sowing is 11% advanced and the production is expected around 47 Mt.

In its monthly report, the IGC left its estimate of world wheat production unchanged at 763 Mt but revised its maize production estimate downwards by 6 Mt to 1160 Mt.

After a week of decline, the largest in seven months, palm oil prices rebound slightly this morning in Kuala Lumpur. Rapeseed prices are under pressure from lower biodiesel prices in a context of falling demand.

The rains over western Europe, although heterogenous, are nevertheless providing some relief from water stress. Maize harvesting is continuing in France with many disappointments in terms of yields.

American market

Soybean prices fell sharply yesterday amid harvest pressure and fears of a slowdown in demand, particularly from China. For the first time in 14 days, the USDA reported no soybean sales to this destination yesterday.

However, US export sales this week have been displayed at the top end of the range for corn and soybeans, at respectively 2,139 Mt and 3,195 Mt. In wheat, on the other hand, exports were disappointing with only 351,244 t.

Harvest operations are continuing in the US for both maize and soybean, the yields are globally satisfactory.

Yesterday, funds were net sellers in 17,500 lots of corn and 13,500 lots of soybeans. In wheat, they were net buyers in 1,500 lots.

Winter wheat sowing is continuing. 34.6% of Kansas fields are experiencing a situation of hydric stress, compared to 29.6% last week.

Black Sea market

Yesterday, Black Sea prices in CPT or FOB basis declined slightly to consolidate an uninterrupted bullish trend that started at the beginning of August. Since mid-August, wheat prices FOB Novorossiysk basis surged from 200 USD/t to 238 USD/t before yesterday's decline.

Expressed in hryvna for the Ukrainian domestic market or in ruble for the Russian one, wheat prices are currently dealing on record levels. In such context, producers are progressively getting back on the market. Most of them are fearing to see the wheat following sunflower’s trend. Indeed, the oilseed plunged by about -10% in a week!