European market

Nice price increase on both Euronext and Chicago yesterday, in a context where operators are integrating new discussions between China and the US on one hand, and fundamentals that could prove tense with the decline in cereal production among the main exporting countries for the current season.

In the European markets, prices are also supported by the euro's decline against the dollar, making it possible to find international competitiveness for EU origins. The drop in availability in Europe is accompanied by an excellent quality in wheat, especially for France, allowing to go to challenge the Russian origins on the export market.

On the international scene, the US has sold just over 154,000 t of soybeans to Mexico and 200,000 t of hard wheat to Iraq. Jordan remains tendering to buy wheat.

From a chartist point of view, we note the rebound in wheat prices on Euronext expiry December on the support area of ​​205-206 €/t prompting buyers to reposition themselves on these levels. From a climatic point of view the lack of rainfall and the return of a warm and dry weather expected in Europe next week is starting to cause concern about future planting, especially on rapeseed. Rapeseed prices are also finding support in the firmness of soybean and canola prices.

Corn prices on Euronext also showed firmness, while the lack of rainfall in France will be very detrimental for future production.

American market

Sharp rise in soybean prices yesterday, in a context where negotiations between China and the USA are back on the table. China cannot deal without American origins needing to import around 100 million tons annually, or about 60% of international availability. The South American continent will not be able to meet these needs alone, except to have to import from the USA.

The funds were active yesterday by buying 14,000 lots of corn, 20,000 lots of soybeans and 4,000 lots of wheat.

Wheat also progressed yesterday thanks to good weekly export sales activity in the US and in a context of less availability in the coming months.

To note the firmness of prices in Chicago, despite the rise in the US dollar which penalizes the competitiveness of American origins. This illustrates the tension in the markets, particularly with supported wheat exports from the Black Sea, suggesting that stocks will be tensed at the end of the season in this region.

Black Sea market

The Russian grain quality assessment center is continuing its wheat analyzes and shows a gradual reduction in the share of milling quality in the total harvest. This situation is rather singular because usually, a year of average yields is generally synonymous with good quality. It turns out that the quality obtained this year will be lower than last year, despite a yield reduction by -20%. To date, the proportion of wheat with a protein content above 12% with a gluten content above 23% and a Hagberg fall number above 150 sec is estimated at less than 20 % compared to almost 22 % last year at the same time.

Further deterioration by this institute of Russian quality is expected when new wheat tests from the Central and Volga districts will be published. Indeed, the quality in these regions is somewhat disappointing compared to last year.