European market
Depression continues on the commodity markets as a result of trade tensions between China and the US. In this context, soybean prices fell sharply below 9 USD/bushel returning around 8.40 USD/bushel during the session and so a lowest level for the last 10 years and despite all the fundamental analysis. The prospect of seeing American origins taxed up to 25% from July 6 by the Chinese, is pushing market prices down. Nevertheless, it seems hard to imagine that China could completely avoid American origins until next autumn. Furthermore, the US should not forget that it is the China who hold most of the US debt.
This negative context for global trade weighs on all commodities and comes on top of the recurring northern hemisphere harvest pressure, all the more so since the SNCF strike has generated significant carryover stocks for many French elevators. In this context pf logistical difficulties, harvest deliveries are registering a sharp decline.
Egypt bought 240 000 t of wheat from Romania, recalling the competitiveness of this origin on the international market. Also, interesting to note is the latest purchase by South Korea of 180,000 t of soybean meal from South America. Canada faces a suspension of wheat imports from Japan and South Korea following the discovery of traces of GMOs.
Rapeseed prices also fell sharply, in the wake of soybean and palm oil.
The return of the anti-depression and warm weather in France will allow farmers to go on with winter barley harvesting works. First yield and qualities are correct.
American market
US markets fell sharply during a very hectic session, similar to a panic during the day, especially on soybeans.
It is to note that the stakes are high, since China imports 100 million tons of soybeans per year, mainly from the USA and Brazil. If Chinese imports from the US are very small at this time of the year, it is estimated that more than 3 million tons have already been canceled. At an annual rate, Chinese people usually buy up to 1/3 of their needs from the USA.
Corn prices also registered a sharp decrease in a context of fears about Chinese ethanol imports but also due to favorable weather conditions on the Corn Belt.
Yesterday, funds were net sellers in 32 000 lots of corn, 23 000 lots of soybeans and 8 000 lots of wheat. In a week, nearly 100,000 corn contracts have been sold on a net position, reducing their long positions in the market.
Black Sea market
First wheat cuts have been observed in the Nikolaev and Kherson oblasts, two coastal regions of the Ukrainian black sea LITTORAL. The harvest has begun 15 days in advance because of the warm and dry conditions of past weeks. The lack of precipitations since spring has penalized the end of the growth cycle, hindering the grain filling stage. Therefore, some crops are scalding and the TKW is very heterogenous and deceiving. The Agritel teams are currently going up towards the oblasts of Kirovograd and Zaporijia.
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