European market

Markets are continuing their decrease started at the beginning of the week, in the wake of Chicago. In France, harvesting works are going forth, sowing satisfactory results for wheat. Quality seems good for now, even if in some areas concerns related to Fusarium were to register. The levels of protein and specific weights are generally satisfactory. Regarding rapeseed, the heterogeneity remains, while yields can fluctuate from simple to double in one plot.

Last trading session was marked by the publication of the latest FranceAgriMer reports which highlighted its new balance sheet estimates for the 2017/2018 campaign:

• For wheat, the carry-over stock is revised upwards to 3.0 million against 2.6 last month, following a downward revision of third-country exports to 8.17 Mt vs 8.4 for the previous estimation. The collect is also seen higher at 33.37 Mt against 32.97 Mt last time.  Intra-EU exports, however, are revised up to 9.26 million against 9.03 Mt previously
• Regarding barley, the carry-over stock is revised upwards to 1.67 Mt against 1.40 Mt last month. This revision follows a decrease in third-country exports to 2.6 Mt compared to 2.8 for the previous estimation.
• For corn, carry-over stocks were revised up to 2.91 million against 2.84 last month.

On the international stage Indonesia bought about 90 000 t of wheat milling from Black Sea origins.

From a geopolitical point of view, the US continues to outbid measures of distortion of competition, threatening to tax more import products. This is of course detrimental to world trade while prices of agricultural commodities in the US are falling, particularly soybeans.

After Sovecon, it is now Ikar's turn to revise downward their Russian wheat estimate at 70.8 million tons, against 71.5 previously. The agency also sees Russian exports at 32.5 Mt for wheat during the 2018/2019 season, compared to over 40 million for 2017/2018. To note that the Ikar figures include for Crimea.

Today will be  marked by the monthly USDA report tonight at 6 pm.

American market

Very sharp decline in prices again yesterday, in the double context of geopolitical crisis and favorable weather conditions on the corn belt.

Soybean prices are now at a 10-year low, while wheat breached the 5$/bu support level on the 0 December contract.

Yesterday, funds were net sellers in 21 500 lots of corn, 13 500 lots of soybeans and 10 000 lots of wheat.

Beneficial rains are expected on the corn belt in the coming days, but the attention of operators will be focused on tonight's USDA report.

Black Sea market

Ukraine has recently adopted a new legislative framework to regulate the production, processing and labeling of organic products which is gradually approaching European standards. From year to year, organic production continues to grow. Although the number of farms which currently have organic certifications for their production is low (around 250), more than 400 000 ha are already dedicated to this sector. All actors in the industry namely producers, traders and processors are showing a growing interest for this type of production for which the main purpose is export markets. It should be noted that around 80% of Ukrainian exports of organic products are destined for the European market. While unprocessed agricultural materials account for the vast majority of export volumes, the proportion of semi-processed products is also increasing rapidly.

This new law is also an opportunity for the Ministry of Agriculture to show tangible progress on a dossier presented as strategic for the agricultural development of the country, as well as the deployment of irrigation, food quality control, the search for new export markets, and the development of rural areas.