No doubt that the coming week will be again dominated by the coronavirus epidemic. USA will experience a sharp acceleration in the number of deaths and traders will monitor the job market weekly conditions on Thursday. Last week, 6.6 million people lost their job. The meeting of main crude oil producers has been postponed to Thursday and the US could join the discussions. The oil in NY is retreating this morning at 27.20 $/b. The Eurodollar is close to Friday’s level at 1.0820.
On the international stage, USA sold 56 700 t of corn to China. The most marking element on the international market has been the Algerian wheat tender for July shipment (new crop). Algeria asked for prices 15 $/t below offers, suggesting that the country could open soon its market to Black Sea origins. French operators will closely monitor the evolution of the situation. As a reminder, France is the main wheat provider of Algeria.
FranceAgrimer has slightly cut its crop rating in wheat. The French body considers now that 62% of the crops are in good to excellent conditions vs. 63% last week and 84% last year. Winter barley is seen at 63% of good to excellent vs. 62%. Spring barley is now seeded thanks to dry conditions in last few days.
Wheat prices ended the week on a positive note last Friday on Euronext. Same trend for the rapeseed, the canola dropped after that Chinese authorities denied having re-allowed Canadian imports. The palm oil is back to its lowest levels to start the week.
In coming days, the evolution of weather conditions in Black Sea will have to be closely monitored due to a persisting hydric deficit in the region.
The wheat has been the only commodity recording some gains last Friday in Chicago, but the cereal retreated by -4% on the week. The corn has been the most affected commodity with a drop of -4.4% due to the ethanol sector crisis and comfortable plantings outlook for the next season. The soybean declined by -3.1%.
Last Friday, funds were net sellers in 10 000 lots of corn, 6 000 lots of soybean. They were net buyers in 5 500 lots of wheat.
COVID-19 has not yet reached its peak in the US and goods’ flows will probably continue to experience disruptions in the next couple of weeks. The persisting strength of the dollar is penalizing the competitiveness of US origins especially versus those from South America. The Brazilian real is deepening its losses vs. the greenback.
Black Sea market
The evolution of weather conditions in the next couple of weeks is becoming a matter of concern both for producers and international traders. Indeed, if rains are missing during this period, it could significantly affect the potential of winter crops. In this context, producers will monitor the level of precipitations announced by the end of this week. They should be rather limited, but they will help to improve the soil moisture after one month of dryness. Rains will be crucial to facilitate corn and sunflower sowing works.