European market
By extending the ceasefire with Iran, Donald Trump is seeking to defuse the tensions of recent days. Nevertheless, the US blockade remains in place, and the armed forces remain ready to respond to any radical shift in positioning by the occupant of the White House. Once again, markets are adjusting to statements from the US president, with oil temporarily falling back below 90 $/barrel in New York.
Meanwhile, global traffic remains heavily disrupted by these factors. The lack of visibility regarding the Strait of Hormuz is paralysing flows in this region of the world, but not only there. Indeed, some congestion of vessels is also being observed in other key passages, slowing maritime movements.
The euro/dollar parity is back below 1.1750, reinforcing the competitiveness of French wheat, which has nothing to be ashamed of in terms of its current positioning versus the competition. Despite this, business flows remain limited at the end of the campaign, which will mechanically lead to comfortable end-of-campaign stocks. In the field, while crop conditions remain satisfactory at this stage, the lack of rainfall and dry weather forecasts in France are giving rise to some concerns.
Although volumes are thinning as the expiry approaches, the May rapeseed contract managed to close at new highs, pulling other maturities along with it. For August, the seed closed above the psychological threshold of 500 €/t, driven in particular by an oilseed complex that remains supportive. Soybean oil and palm oil are performing well at a time when demand for biodiesel remains strong in the context of the current energy crisis. Some countries are granting exemptions in order to accelerate the incorporation of biodiesel into the energy mix, which naturally supports agricultural markets.
American market
US markets are struggling to distance themselves from the back-and-forth of the occupant of the White House. The escalation of tensions over the weekend has been pushed into the background following the extension of the ceasefire, but operators remain cautious in light of the reality of events.
Progress in corn and soybean planting remains a key focus for the coming weeks, as does the evolution of winter wheat crop conditions. That said, market participants are also keeping a close eye on trade, as new exceptional corn sales were announced yesterday. The USDA reports the sale of 100,000 t to Colombia and 195,000 t to an unknown destination, further reinforcing the positive momentum observed since the start of the campaign.
On the international stage, attention is gradually turning to the highly anticipated meeting between Donald Trump and his Chinese counterpart. Scheduled for mid-May, this meeting is expected to generate its share of volatility, particularly in soybeans.
Soybean oil stands out for its strength in the current context. It is posting new highs in Chicago and is pulling the entire oilseed complex along with it. This firmness is helping to maintain attractive crushing margins, encouraging local operators to increase their crushing volumes. The target of 71 mn t of soybeans crushed in the United States over the course of this campaign should be reached, paving the way for further investment in the years ahead.
Black Sea market
Click here to request full access to the AgriMarkets report to find out more about the Black Sea region, and follow price trends in Russia on a daily basis.
