Last week started the decline of the euro against the dollar and continues this week returning to its lowest level in a month. This factor provides a support element for cereal prices in Europe and particularly for wheat whose export activity this season remains sustained. This decline in the euro leads to an upward price adjustment. Prices rose yesterday evening on Euronext, regaining the levels of the end of last week.
In France, the latest figures from the Ministry of Agriculture confirmed a downward revision of soft wheat production by -0.2 Mt to 39.5 Mt. The barley production is also adjusted slightly to 13.7 Mt or by +0.1 Mt compared to last month. The rainy conditions do not facilitate the corn harvest in France; the Ministry is now expecting a corn production at 12.6 Mt (+0.1 Mt vs last month). The new FranceAgriMer estimates of the balance sheets will be communicated today with the projection of the stock volumes at the end of the campaign.
In oilseeds, despite the confirmation of a decrease in rapeseed production by the Ministry of Agriculture to 3.4 Mt in France, prices have declined after the recent high recorded earlier this week. On Euronext, the rapeseed prices for February 2020 contract returned below the level of 390 €/t. Palm oil also marked a drop yesterday after touching its highest level for nearly 2 years in Kuala Lumpur.
Temperatures are dropping dramatically in the USA, providing a support element, especially for grain markets. At the same time, weekly shipment figures are up and slightly above expectations. As a result, wheat prices rose more than by +10 cents yesterday in Chicago on the closest, testing the resistance levels. According to the latest USDA figures, 92% of winter wheat plantings are done, thus returning to similar levels of recent years.
In corn, harvests are progressing but cannot catch the delay. To date, 66% of the harvesting work has been completed, which is 19 points behind the five-year average. The shipment figures are in line with expectations in a context where Brazil is still very active on the export side.
Soybean prices are stagnating after the fallback recorded earlier this week. In terms of harvesting, 85% of fieldwork is now complete.
Black Sea market
Ukrainian President Volodimir Zelenski announced on Monday that a referendum could be held to decide whether or not to sell land to foreigners. As a reminder, the lifting of the moratorium is scheduled for October 2020. The administration had previously proposed the first five years after the reform to sell land to Ukrainian individuals and companies, then to foreigners. However, this issue is debated because the population is obviously not in favor of a land takeover by foreign investors who could control a large part of Ukrainian territory and its famous chernozems. This black soil is among the richest in the world, with Ukraine concentrating more than 15% of the world's chernozems.