European market

Prices remain particularly sensitive to geopolitical developments, and grain and energy markets continue to react to headline-driven announcements. The start of this week provides a fresh illustration: after announcing the cancellation of an attack targeting Iran, Donald Trump is now referring to a new round of negotiations as early as this Monday. That alone was enough to push oil prices lower, which should have a significant impact on grain markets during the first trading session of the week.

Yet, even as financial operators increase the pressure, logistics in the Black Sea remain disrupted. The alternative routes put in place to export grain from this part of the world are providing some reassurance, but they will not be able to fully compensate for normal activity. In addition, new strikes have been reported in recent days, which should continue to support a risk premium on the markets.

On the ground, harvest work is now complete in France for winter crops. Attention is now turning to spring crops, whose deterioration is unfortunately likely to leave a lasting impression. According to Céré'Obs, 34 % of corn is rated good to excellent, but this percentage is falling rapidly. Weather conditions expected over the coming days are unlikely to improve the situation and are also raising fears for sunflowers.

For the next marketing year, concerns are already focused on rapeseed sowings, as the moisture deficit remains significant. Without meaningful rainfall in the coming days, the initially planned oilseed area could be revised lower.

In the current geopolitical context and following central bank decisions, the euro/dollar exchange rate is trading above 1.15. This situation is likely to weigh on the competitiveness of European offers once global trade flows return to a more normal pattern.

American market

Like their European counterparts, US markets are reacting to international turbulence. Donald Trump’s positions are sending mixed signals to the markets, prompting financial operators to adjust their exposure, particularly to grains and energy products. The summer period is also encouraging many of them to reduce their positions ahead of the holiday season.

Beyond geopolitical considerations, the weather is also under the spotlight. As weather models have shifted toward increased rainfall across the Corn Belt, concerns have eased somewhat. However, the situation does not yet appear optimal, which could at any moment revive a risk premium in the markets.

On the commercial front, attention remains focused on China, as the Middle Kingdom continues to be active on the buying side. Although questions remain regarding the volumes it still needs to import to comply with the agreement reached a few months ago, the momentum remains supportive. At the end of last week, a new exceptional sale of 252,000 tonnes of soybeans for an unknown destination was recorded.

Black Sea market

Click here to request full access to the AgriMarkets report to find out more about the Black Sea region, and follow price trends in Russia on a daily basis.