European market

Markets were seeking for direction yesterday, on the eve of the USDA's quarterly report.

Agritel released yesterday its estimate of wheat production for Ukraine in 2018 at 24.7 million tonnes, down 5% from last year, a consequence of the particularly pronounced water deficit in the country's south-east and a slight lowering of surfaces. At the same time, the European Commission also revised down its estimate of wheat production to 137.6 million tonnes, compared to 140.25 Mt previously reported. Leaving the third country export estimates at 27 million tonnes would lead to a downward revision of the 2018/2019 end-of-season stock to 13.4 million tonnes against 16 million tonnes. The commission also revised down its estimate of barley production in Europe to 58.4 Mt against 61 Mt. Rapeseed forecast was also corrected to 20.8 Mt against 20.7 Mt.

Barley harvest is going on in France supported by hot and dry weather conditions. First results are showing heterogeneity on both quantities as well as qualities. Yields could be slightly lower than last year.

In the world, Egypt purchased 25 000 tons of soybean oil and 40 000 tons of sunflower oil. Jordan launched a tender for 120 000 t of hard quality wheat.

Rapeseed prices strengthened yesterday. The first harvest results are disappointing in France as expected.

American market

The US markets slightly retreated yesterday still negatively impacted by the geopolitical tensions between Washington and Beijing. The decline in soybean prices allows the United States to export to unusual destinations and this is partly offsetting the drop of volumes to China. The weekly export figures were thus at the top of the range of traders' expectations.

The USDA quarterly report will be the main event of the week today at 18h00 (Paris time). 

Traders expect an upward revision of stocks and acreages for soybeans as well as corn.

The funds were net sellers for 13 000 lots of corn, 5 000 of soybean and 4 000 of wheat.

Black Sea market

Following a Crop Tour in Ukraine last week, Agritel released yesterday its estimate for the Ukrainian wheat production in 2018 at 24.7 Mt. This figure shows a drop of -5% compared to last year which is the combination of a slight decline in area together with the impact of drought on the potential of wheat in the south-eastern regions of the country.

The return of the rains could slower the harvest pace for barley, wheat and rapeseed. These rains would be supportive for late crops, namely sunflower, soybean and corn.