European market
Grain prices are taking a break after the firming observed at the end of last week. The positions buying back by financial operators has led wheat on the May Euronext contract to approach the €200/t level, a strong resistance for now. Two elements mainly drive the markets: the weather and geopolitics.
As for the weather, the drought affecting part of the American plains has provided some arguments for operators to carry out short covering operations, but the phenomenon seems localized for the moment and should not significantly change the content of the fundamentals. In Europe, the return of dry weather in France reassures and should allow a resumption of field work in the coming days. However, some areas of the Atlantic coast will not have this opportunity, as the rainfall totals have been significant in recent days.
On the geopolitical level, the talks around a peace plan in Ukraine remain too little concrete to be taken seriously. The day also marks the sad anniversary of the escalation of the conflict four years ago. Ukrainian agriculture nevertheless manages to maintain production levels close to its historical average, while exports are recovering as well as possible. Another point of tension: Iran, where Donald Trump is casting doubt on a possible military intervention. Finally, in Mexico, the situation is deteriorating, rekindling international tensions and generating risk premiums on all markets.
Faced with the increase in crude oil and soybean oil in particular, rapeseed managed to close up and above the level of € 490/t on the Euronext May contract.
American market
It is difficult for US operators to see clearly in an environment constantly heckled by Donald Trump's statements. Professionals in the sector are now waiting for the reactions of the main importing countries to the new uniform customs duties announced by the White House. The uncertainty is at its peak, and everyone is trying to cope with the widening gap between political announcements on the one hand, and the reality on the other.
The product most concerned remains soybeans, while Chinese retaliatory measures are still pending. Yesterday's session was also the perfect illustration of this: a strong above-average volatility, reflecting a hesitant and nervous market.
Another element of monitoring: the weather. The drought on winter wheat stands in contrast to the snowstorm that is hitting the East Coast, even if this region represents only a small share of American agricultural production.
Further south, attention is turning to Brazil, where soybean harvests are continuing before giving way to Safrinha corn seedlings. The delay in the fields work remains to be monitored, although at this stage nothing seems alarming.
Black Sea market
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