European market
Markets were depressed yesterday on the back of increased trade tensions between USA and China and their consequences for world exchanges. China has announced new measures to counter US intention to tax 200 billion $ of Chinese products. China would implement duties of 25% on a lot of American goods that could take effect on the 6th of July. In such environment, all commodities retreated yesterday leaving fundamentals in the background.
In France first harvests of winter barley have started with yields in line with last years’ average so far. It is too early to draw conclusions both about quantity and quality.
The Black Sea region remains at the center of attention, the Agritel estimation about Russian wheat production will be released this Thursday at 2 pm CET.
On the international stage, Egypt is trying to benefit from the decline of prices and launched a soft wheat tender. South Korea bought 66 000 t of corn.
The dollar remains steady vs all currencies, dealing at 1.1630 vs euro and at 63.40 vs ruble.
According ABARES, the wheat production in Australia could decline compared to last season due to hydric deficit in the eastern part of the country. According last previsions, it should not exceed 22 Mt. For the barley and canola, the output is seen respectively at 9.2 Mt and 3.1 Mt.
The rapeseed retreated slightly yesterday, following the soybean and the palm. Fears are rising about the level of the French production this season.
American market
US wheat and corn retreated sharply yesterday due to funds’ sell-off and caused by favorable weather conditions for wheat harvest and beneficial rains in the Corn Belt.
After markets’ closure, USDA released its weekly crop rating. 78% of corn are considered good to excellent vs 77% last week, this is one of the best number for decades. For the soybean, 73% of crops are good to excellent, one point below last week. Winter wheat harvest progression reached 27% by last Sunday vs a five-year average to date of 19%.
This morning, soybean is plunging, consequence of a possible trade war between USA and China.
Yesterday, funds were net sellers in 18 500 lots of corn and 7 000 lots of wheat. They were net buyers in 6 000 lots of soybean.
Black Sea market
In the south oblasts of Ukraine (Odessa and Nikolaev), high temperatures and lack of moisture should penalize harvest potential. Precipitations recorded since the end of March are representing less than 40% of rains during the same period of last year. However, agronomists met during the EAT crop tour, conditions were outstanding by the end of winter. This potential has never been converted to yields and results should only be average this year. However, bear in mind that this region has a limited weight in the national output and we will study now with interest the conditions in the central and western parts of the country.
