European market

The correction that began last Friday continued yesterday on the grain market, against a backdrop of hopes for easing tensions both in the Middle East and in the Black Sea, as reflected by the drop in crude oil prices.

However, oil is rebounding this Wednesday morning after new Iranian strikes were reported in the Persian Gulf. In addition, while President Zelensky was meeting one-on-one with Donald Trump yesterday, new attacks on grain vessels were reported in the Black Sea. Geopolitical tensions and logistical bottlenecks therefore remain in place.

Market participants will also be watching the FED meeting this Wednesday. For his second FOMC, Kévin Warsh’s stance will be scrutinized all the more closely as it could prove more hawkish than expected. Ahead of this, the currency market is trading with a firm dollar index and the euro/dollar below 1.1400.

In Europe, the consequences of the lack of rainfall are not only being felt through a disappointing harvest and the disastrous condition of summer crops, they are also becoming evident through the low water levels affecting the main waterways, namely the Rhine and the Danube. Supply disruptions are severe for the regions concerned. Among the current challenges is the delicate expiry of the Euronext rapeseed contract for Aug 26. In its final trading days, this maturity has fallen by more than 100 €/t, wiping out seven months of gains. This move is contributing to the sharp, though less severe, correction seen on the benchmark Nov 26 contract, which closed yesterday at its lowest level since July 10 at 531 €/t.

American market

Yesterday was a transitional session on the Chicago market. The bearish momentum of recent sessions ran up against the reality of deteriorating corn and soybean crop conditions. Similarly, in wheat, the continuing navigation disruptions in the Black Sea remain problematic. Against this backdrop, prices remained hesitant before ultimately closing close to unchanged in wheat, and slightly higher in corn and soybeans.

While some beneficial rainfall is expected over the weekend across the heart of the Corn Belt, the western fringe is likely to receive little precipitation. This central strip stretching from North Dakota to Kansas through South Dakota and Nebraska is an area where corn and soybean acreage has shown a marked upward trend in recent years. The deterioration in crop ratings published by the USDA on Monday evening proved particularly severe.

Black Sea market

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