European market
Wheat prices progressed significantly yesterday both on physical and futures. The December delivery is testing the resistance area of 178 €/t before the USDA report of this Thursday. This publication will provide or not the opportunity to breach this technical resistance according the figures displayed.
The result of the Egyptian tender disappointed French operators as 295 000 t of wheat have been bought from Black Sea origins. Ukraine sold 115 000 t and Russia 180 000 t at prices inside a range of 220.42 to 222.61 $/t CIF. During the France Export Céréales meeting in Casablanca, it has been confirmed that Morocco should buy 3.8 Mt of wheat during this marketing year, consequence of a poor harvest this season estimated at 2.68 Mt. France remains a special partner on this destination, its last year’s share of market was exceeding 50%. The beginning of the wheat export campaign in France is rather disappointing so far with only 2.7 Mt shipped during July and August, including 1.4 Mt out of Europe. The business should pick up on the September/October period.
The French Ag Minister has revised up its soft wheat production estimation to 39.7 Mt vs 39.45 Mt seen last month. The output of corn has been cut to 12.5 Mt vs 12.8 Mt forecasted last month. The barley and rapeseed productions have been left unchanged at respectively 13.6 Mt and 3.5 Mt.
Rapeseed prices are benefitting from the last two days firmness of the palm caused by a lower production than expected by most of analysts. The strength of the canola is also a factor of support. Prices in Winnipeg have reached a highest level since last March due to delayed harvests caused by repeated rains and by the prevision of a cold snap for the end of this week.
American market
Sharp rebound of prices yesterday in Chicago, mainly caused by technical reasons before the USDA report of tomorrow.
Analysts are trying to predict what the US Ag Minister could release. Most of them are betting on lower yields. The range of forecasts for the corn is between 166 to 169 bushel/acre and for the soybean, between 46 and 48 bushel/acre. As a reminder, the last USDA’s assessments were respectively of 168.2 and 47.9 bushel/acre.
In this context, funds are buying back a part of their short positions, the move is amplified by the fears of damages that could be caused by a cold snap predicted for this weekend in the north of USA.
Yesterday, funds were net buyers in 26 000 lots of corn, 10 000 lots of soybean and 7 500 lots of wheat.
Black Sea market
First morning frosts have been observed on a large part of plains around the Black Sea. A dry weather is forecasted for the next couple of weeks in the European part of the region; the harvesting works should gain momentum and the quality of the crop will be preserved. Ukrainian producers will now be able to cut the remaining part of the sunflower and soybean crop in next two weeks. Only the corn will have to be completed. Same situation for Russian farmers, sunflower yields will reach a record high in the country. Russia does not want to leave Ukraine as the main world provider of sun oil forever…
