European market
Wheat prices rebounded onto their support area at 182 €/t on the Euronext December contract, confirming the dominance of technical aspects in the markets and awaiting the return on the forefront of fundamentals with the evolution of climatic conditions on the Black Sea area. Indeed, the month of June is the period impacting the most the production potential on these two countries.
The euro remains also a source of volatility with a parity evolving at 1.1680 this morning against the USD.
Also, to note is a sharp degradation of the basis on physical markets for feed barley. Those are now displayed at -14€/t against -4 a couple of weeks ago.
On the international stage, South Korea continues to buy corn from optional origins while operators are waiting the results of the Algerian tender for wheat loaded during the beginning of July.
European customs are displaying wheat exports for third countries at 247 000 t and so 18.6 Mt since the beginning of the campaign against 22.8 Mt last year to date. (-18 %) For barley, numbers are similar to those of last year while corn imports rebounded frim 11.2 Mt to 15.8 Mt and so an increase of 40 %.
Rapeseed registered a decrease yesterday on Euronext, essentially on technical considerations but also because of the downturn of palm oil. This is the consequence of the decrease of the export activity of the country
American market
Consolidation yesterday on the CBOT after the strong price movement of the beginning of the week.
In wheat, operators remain divided between better climatic conditions in the US and remaining fears in the Black Sea area.
Corn and soybean sowings are proceeding in optimal conditions, which currently limits the upward potential on these two products.
Negotiations between the US and China remains at center of all concerns, each side blowing hot and cold. Taxes imposed by Trump on steel and aluminum are generating tensions with Mexico which could retaliation taxes on corn.
Funds were net buyers in 1000 lots of corn and 3 000 lots of wheat. They were sellers in 4 500 lots of soybean.
Black Sea market
Estimates are falling in the Black Sea area at the time where the harvest should begin in less than a month on major production areas. In Russia, meteorological previsions are displaying a winter wheat production falling – 10% compared to last year in view of dry climatic conditions in southern parts of the country. Furthermore, weather models are not announcing any rains in the next 15 days in southern Districts which should penalize the grain filling stage.
In Ukraine, state weather service is displaying a winter wheat production at 24 Mt against 25.4 Mt last year (winter wheat represents around 95% of all wheat in Ukraine) This drop can also be linked to the dryness which persists on all regions of the country and mostly in southern regions. European Agritel Tour teams will be in the fields next Monday in Romania before going to Russia and Ukraine to verify their estimations.
