European market

Markets declined yesterday following the improvements of climatic conditions in USA where beneficial rains are expected. The drop of the ruble is also a bearish factor for the markets, considering the strong harvest pressure in Russia consequence of high carryout.

Winter barley harvest works are in full swing in France, yields look heterogeneous. Quality is globally good to very good specific weight is satisfactory, with counterpart high protein level that should downgrade some malting varieties into feed.

First cuts of wheat have also started, but it is too early to come to any conclusions.

The business on futures markets has slow downed yesterday, after very high volumes recorded these last few sessions. In wheat, 41 756 lots were exchanged on Euronext and 935 on the CME.

On the international stage, Egypt has launched a wheat tender for shipment from July 25 to August 5, results will be known this afternoon.

In last two days, rapeseed have experienced a sharp fall, due to the tumble of crude oil and veg oils, including palm and soybean. The market is ignoring the shortfall of next season European balance sheet that will be however compensated by an increase of imports. Climatic conditions in Canada are currently favorable.

The euro is in little evolution vs dollar. Interest rates should stay low in Europe and could rise again in USA before the end of the year.

American market

American market was falling yesterday, and after the rise recorded these last few days, some optimism is back on corn and soybean markets. The critical time of the flowering period is not yet reached, pushing operators to be careful, and even more before quarterly report about stocks and planted areas in USA planned on June 30.

Producers from the Corn Belt are optimistic, contrary to spring wheat farmers.

Other bearish element, weekly ethanol production decrease posted by IEA.

In Chicago, funds stopped their wheat short covering program and were net sellers in 6 000 lots of both corn and wheat and sellers of 9 000 contracts of soybean.

Black Sea market

In the wake of the fall in crude oil prices, the Russian ruble has depreciated significantly, losing nearly 10 % against the US dollar during  last 10 days. The USD / RUR parity appears this morning above the 60 level. The Russian currency is therefore at its lowest level since the end of January 2017.

In this context, prices for domestic cereals are increasing, which should prompt producers to sell much of their production as soon as the harvest is starting. At the end of the 2016/17 season, the relative strength of the ruble was often highlighted as one of the main reasons for the retention of goods by producers.

Thus, the combination of important carry-out stocks, good prospects for harvesting, and devaluation of the ruble should enable the Russian Federation to make a particularly noticeable start for the 2017/18 season.