European market
Markets were still hesitant yesterday, as traders are cautious ahead of the USDA's quarterly stock report released tonight at 6 pm Paris time.
The highlight of the night was the debate between Donald Trump and Joe Biden, a debate of poor level according to observers. In this context, the dollar lost some ground this morning, posted at 1.1730 against the euro and 78.70 against the ruble. Crude oil is giving ground, trading at 38.90 $/b this morning in New York, in a context of the global expansion of the virus and fears about the economy.
The fears of water deficit are easing in Central Europe, but not in the Black Sea. The Ukrainian Ministry of Agriculture estimates that the winter wheat area could fall to 6.1 Mha against 6.7 Mha last year. To date, about a quarter of the area has been sown. The situation is also worrying, mainly in southern Russia. So, the effect of the La Nina is well noted, with more rainfall over Australia, which to date is good for the next wheat harvest, which could exceed 30 Mt.
On the international scene, the USA has sold 100,000 t of soybeans to Mexico. Turkey has tendered 135,000 t of milling wheat and Thailand 213,000 t of feed wheat.
Vegetable oil prices were dropping yesterday, with palm and canola at the forefront, which was reflected in rapeseed, despite a very tense balance sheet for this product.
American market
Cereal prices changed little yesterday on Chicago, while soybean prices were down slightly. Fears that China's buying momentum is slowing are weighing on prices, as is the progress of the harvest. Last Monday, 20% of soybean acreage was estimated to have been harvested in the US, compared with an average of 15% to date.
Funds were selling yesterday for 10,000 lots of maize, 4,000 lots of soybeans and 2,000 lots of wheat. Tonight's USDA report should give the market a new direction, at least in the short term. The consensus among traders estimates corn stocks at 2.25 billion bushels and soybeans at 576 million bushels.
It will be interesting to see what corn consumption to the ethanol sector is planned by the USDA, in the context of declining global demand linked to the economic crisis.
The funds have a net long position in corn and soybeans, leaving room for profit-taking sales in case of a surprise in the quarterly report.
Black Sea market
After peaking in the middle of last week, cereal prices remain firm in the Black Sea region, in the context of still strong demand.
Prices for wheat 12.5% FOB Russia and for wheat 11.5% FOB Ukraine are respectively at 233 and 231 $/t, vs 238 and 234 $/t of the last week’ high. Corn FOB Odessa traded at 196 $/t vs 198 $/t last week. Barley prices even increased a little at 198 $/t. On the oilseed side, demand in domestic markets is allowing sunflower and soybean prices to rebound slightly. This rebound in oilseed prices can also be partly explained by the return of rains in Ukraine, causing a halt in the harvest and a decrease in a proposal by farmers.