European market
The competitiveness of French origins was confirmed yesterday on the international scene, with the purchase by Egypt of 480,000 t of wheat, 240,000 t of which are of French origin. The rest is of Russian origin for 120,000 t, Romanian for 60,000 t and Ukrainian for 60,000 t. This will tighten the French balance sheet a little more, with a carryover stock at the end of the campaign which could fall below 2.5 Mt.
The yesterday’s sale of 115,000 t of corn by the US to Mexico and 60,000 t to South Korea should also be noted. Jordan bought 60,000 tonnes of feed barley from the optional origin.
The current rains in France do not give rise to any particular fears, provided that they do not hinder spring sowing in the days and weeks ahead. A drop in temperatures is expected in Europe at the end of the week, just as in the USA.
The markets seem to have to mark a pause in their progression, with the level of resistance at 300 $/t FOB Black Sea in wheat. Traders are cautious ahead of next Tuesday's USDA report.
Canola prices fell back yesterday after posting a double top from a chartist point of view. The palm is declining this morning on Kuala Lumpur, which could put pressure on the rise in crude oil.
The dollar continues its progression posted this morning at 1.2040 against the euro and at 75.90 against the ruble. Same for the crude oil which is trading this morning on New York at the 55 $/barrel.
American market
The prices for all products decreased yesterday on Chicago, in the context of profit-taking by funds ahead of the USDA report on 9 February.
The decline was also motivated by the strength of the dollar, causing a loss of competitiveness on the international scene for US origins.
However, the fundamentals have not changed much with tight balance sheets, especially as Brazilian soybean harvests are still behind schedule. In Mato Grosso, only 4.7% of the area is harvested compared to 17.6% last year to date.
In Argentina, new strikes by dockworkers are delaying loading.
Funds were net sellers yesterday for 25,000 lots of corn, 12,000 lots of soybean and 5,000 lots of wheat.
Black Sea market
Egyptian GASC tender was eagerly expected since mid-January after the cancellation of its previous tender. Yesterday Egypt secured a large volume of wheat at 480,000 t. France has the lion's share with 240,000 t contracted. Despite the imminent introduction of export taxes in Russia, 120,000 t of wheat were sold to Egyptian state buyer. This situation seems to indicate a change in the strategy of the producers, who have decided to sell the rest rather than wait for the end of the season. They seem to be resigned to the introduction of the floating tax in the coming months.
The Romanian and Ukrainian origins have each been selected for 60,000 t of wheat.