European market
The USDA report confirmed a strong corn export activity in the US but a disappointing one in soybean. Regarding wheat, US ending stocks were above expectations. In this context, the report was displayed neutral to bearish for wheat and soybean and bullish for corn.
Regarding global balance sheets no major surprises except the difference between corn production estimates in Brazil displayed at 88 Mt for the CONAB and 95 Mt for the USDA.
Financial market made the headlines yesterday with a new downturn of American stock exchanges. Indeed, the Dow Jones and the Nasdaq lost 4 % each. Fears of a return of inflation with a rise in rates and combined with the vote by the senate of the American budget led to a selling spree from operators.
In this context, wheat prices registered a decrease on Euronext yesterday while rapeseed and corn remained nearly unchanged.
On the international stage, Egypt is profiting of this little decrease to launch a new tender. Same situation for Jordan with a tender for 100 000 t of hard wheat and 100 000 t of feed barley.
Regarding climatic conditions, no major worries are to be reported for the moment on the cold snap in Europe . On the Black sea, major production zones are also considered in good conditions
The Euro continues its downturn vs the Dollar displayed at 1.2250 this morning. Indeed, the dollar benefits from a rapid increase of interest rates.
Weekly EU exports in wheat were on very low level at 157 000 t. They were higher in barley, confirming the strong appetite of buyers on the international stage.
American market
The monthly USDA report of February revised up the US export perspectives in corn leading to a downturn in stocks. They are now displayed at 59.78 Mt, a downturn of -3.18 Mt compared to the previous month in the USDA. The progression of exported volumes seems entirely possible if US prices stay competitive compared to south American origins and knowing that the Argentinian corn production is awaited lower because of dry conditions. Corn in Chicago is evolving close to the highest levels of last October with rising fears on the Brazilian production.
In Soybean, the situation is becoming heavier on the American market with a decrease of exports. The USDA revised down its US export number for the campaign 2017/2018 at 57.5 Mt and so -1.64 Mt compared to last January. Despite a volatile session, prices have finally displayed an increase at end of the day driven by climatic concerns in Argentina where the production is awaited lower by -2 Mt. In Brazil, the USDA and the CONAB have revised up the production potential compared to last month but in a lesser extent than awaited.
After a new high in 4 months during the trading session, the wheat market marked a downturn at the integrating an upward revision of wheat stocks in the USA and a global export market dominated by the Black Sea origins.
Black Sea market
The USDA highlighted some changes on the Black Sea area in its report published Thursday evening. Regarding wheat, the export target for Russia has been revised up by + 1 Mt at 36 Mt what seems logic in view of the record exports observed since beginning of the campaign. In Ukraine, export have not been adjusted and are staying on a realistic level at 17 Mt with a production revised up by +0.5 Mt at 27 Mt against estimation of the Agricultural ministry at 26.12 Mt. In Kazakhstan, nothing has changed but it is still interesting to note that the export target of the USDA seems relatively low at 7.5 Mt. In corn, the USDA aligned its production in Ukraine on the estimation from the Agricultural ministry at 24.12 Mt, a decrease of - 0.9 Mt. Exports have been corrected downwards at 20 Mt which seems ambitious in view of the delay registered on Ukrainian corn loadings. You will find more details of the Black sea balance sheets in the Black Sea Highlight (click here) published yesterday by the Agritel analysts in Kiev.
