European market

The trade war between USA and China is offsetting fundamentals and is provoking massive sell-off from the funds. These actors are fearing a sharp drop of world exchanges. The soybean is the most impacted product by these tensions between USA and China as they are respectively first producer and biggest importer.

USA are threatening to set duties on the equivalent of 50 billion dollars of Chinese products and China has replied in saying they will tax 659 US products, including soybean at 25%. These measures could be implemented on the 6th of July.

The euro is in decline following Thursday’s decisions of the ECB not to raise rates before summer 2019. The asset purchase program will end by the end of the year.

First harvests of barley are starting in France, and it is too early to say about yields. The works should gain momentum this week with the return of dry weather.

On the international stage, South Korea bought 60 000 t of corn and Jordan launched a tender in 120 000 t of feed barley.

FranceAgrimer has cut its crop rating of winter wheat to 76% considered as good to excellent vs 79% last week. Same statement for winter barley with 74% vs 75%, spring barley with 77% vs 78% and corn with 74% vs 77%.

Rapeseed prices were down by the end of last week, following the soybean, palm and crude oil.

American market

Large drop of soybean on Friday after a very volatile session on this product but also on wheat and corn.

On a climatic point of view, conditions are favorable for the crops in USA and market’s adjustments are increased by trade tensions.

The trade war between USA and China is pushing financial funds to increase their sales. Soybean prices have reached their lowest point of the year. Brazilian origins are benefitting from in this tense geopolitical context.

25% of import tariffs on US soybean should be implemented by China from the 6th of July if USA maintain their sanctions.

On Friday, funds were net sellers in 6 000 lots of corn, 16 000 lots of soybean and 3 500 lots of wheat.

Black Sea market

Agritel’s crop tour team is starting another week of counting in a third country. After Romania and Russia, fields will now be visited in Ukraine and more especially in the center and south plains of the country. It looks already that Black Sea will reduce its contribution to the global balance sheet in 2018-19. Indeed, dryness and lack of moisture have penalized the crops ahead of first harvests. In Ukraine, during an agriculture study trip organized for some clients ten days ago, we noticed a big heterogeneity of winter and spring crops confirming the impression of a lower 2018 harvest compared to last year. The question is to know in which proportions? We will try to answer to this question this week after a 3 000 kilometers’ trip in the main regions of production of these three countries.