European market
Markets were consolidating on Friday supported by export activity. Algeria bought 590 000 t of wheat for November deliveries for prices between 200 and 201 usd/t CAF. If the origins are optional, it is likely that France obtained a big market share for this tender. Indeed, quality degradations in Germany and Poland allowed France with its good crop to stay competitive. Nevertheless, the rise of the euro against the dollar at 1.1920 could change this situation.
Trade activity on Euronext was registered at 41 277 exchanged contracts in wheat and 26 contracts on the European CME.
On the international stage, 132 000 t of American soybeans were sold to China. Russia also sold 200 000 t of milling wheat to Bangladesh.
In Germany, harvest is slowly finishing confirming bad qualities after the heavy rainfalls of past weeks. The German farmer association estimated the wheat harvest at 23.4 Mt down 3% compared to previous year. In Russia, 50% of the area has been harvested and a record crop of more than 80 Mt is awaited.
On Friday, FranceAgriMer displayed “good to excellent” corn in France at 80% compared to 79% for the previous week. The European commission revised up its European wheat production estimate at 139.4 Mt against 138.6 Mt displayed last month. Barley has also been revised up at 58 Mt against 57.5 Mt last month. Regarding corn, the production is estimated at 59.4 Mt against 58.4 Mt last month. Rapeseed was revised at 21.9 Mt against 21.6 Mt.
American market
Calm trading session on the CBOT last Friday. Operators were waiting for the profarmer results published after market close.
Soybean yields were estimated at 48.5 bu/acre against 49.4 bu/acre estimated by the USDA.
Regarding corn, yields were displayed at 167.1 bu/acre against 169.5 dsplayed by the USDA.
Most of the time Profarmer estimations are lower than USDA numbers, that's why this information should have a limited impact on prices.
Friday, funds were net sellers in 10 000 lots of corn and 2 500 lots of soybean. They were net sellers in 2 000 lots of wheat.
Black Sea market
The Russian wheat harvest is progressing. Indeed, on the 25th of August 55.1 % of total area was already harvested and so 15.4 million hectares according to the Agricultural ministry. If the harvest progress is still delayed by 2.3 Mha compared to 2016, volumes are already on higher levels at 63 Mt than last year to date (59 Mt). Even if yields should decrease as usual because of spring wheat’s lower performance compared to winter wheat, it is now certain that this year’s production will be over the level of 2016. Analysts are now working with a production estimate above 79 Mt. Corn harvesting works also started and barley has been harvested at 61.5 % also with better yields than 2016.
With the increase of the Russian production, the question of what the country can really export will be assessed by Agritel’s consultants in Kiev and published inside the next Black Sea Highlight.
