European market
One year to the day after the start of the conflict in Ukraine, the grain market is praising the ability of local producers to adapt, both on an agricultural and logistical level, despite all problems encountered. However, there are still many concerns as the spring sowing season approaches. There is a large amount of land available in Ukraine due to the reduced winter crop plantings. As far as prices are concerned, the Euronext May 2023 future contract is trading at 283.75 €/t, not far from last year's level at the same date.
After the downward movement recorded the day before, wheat prices have rebounded yesterday, helped by a lower Eurodollar which was trading below 1.06. The last wheat tender in Egypt, dominated by Russian origins, showed a persisting high price differential with Europe. This gap will remain a key factor to monitor during the last part of the campaign.
The European Commission has just revised downwards its export estimates for soft wheat by -2 Mt compared to last month. It now expects an export volume of 32 Mt for the 2022/2023 campaign. Despite the expected shipments, barley export volumes have also been revised downwards by -0.5 Mt to 9 Mt. For corn, imports are still forecast at 23 Mt, which is a record level. For rapeseed, the European Commission expects imports to increase this season by +0.50 Mt to 5.6 Mt.
Despite the firmness of palm oil prices, other vegetable oils are running out of steam. In this context, the price of rapeseed fell sharply yesterday.
American market
The first day of the USDA's Agricultural Forum Outlook brought plenty of information about the 2023/2004 crop year, including acreage estimates. Wheat acreage could be up from last year by +8.3% to 49.5 million acres. As a reminder, the 2022/2023 season saw a decline of around -2% due to difficulties encountered, particularly at the time of sowing. Corn acreage is also expected to be up by +2.7% from last year at 91 million acres. Soybean areas are not expected to grow compared to last year and should remain unchanged at 87.5 million acres.
Production forecasts have also been communicated for corn and soybean. Both crops are expected to be higher than in 2022 due to yield assumptions of 181.5 bu/ac for corn and 52 bu/ac for soybeans. This situation, if confirmed, would lead to a subsequent increase in U.S. carryover stocks. Good spring planting conditions will be crucial to confirm this production potential.
As a result, corn prices in Chicago fell yesterday by 15 cents on the May 2023 delivery contract, returning to the $6.60/b support zone. Prices for the 2022 crop are back to one-month lows and are also weighing on the upcoming crop. The December 2023 corn expiry is now trading near $5.85/b, its lowest since the beginning of the year. The downward movement was less strong for soybean since the market remains supported by the South American situation. In wheat, the market was little changed.
Black Sea market
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