European market
Very quiet session on Euronext yesterday as US markets were closed for President Day. This morning in pre-opening, wheat prices are significantly up with a further downward revision of the Australian production by ABARES now estimated at 15.17 Mt vs 15.85 Mt seen last month. The wheat production in Australia will be at lowest since 2008, however, this news was largely anticipated by traders.
On the international stage, Morocco is buying 354 000 t of durum wheat sourced from USA to be delivered on May 31.
The euro continues to stay weak vs dollar at 1.0830. Political and economic issues in Germany are worrying investors. The crude oil is steady at 51.30 $/b on the WTI.
In Europe and Black Sea, temperatures are abnormally high for the season provoking a well-advanced vegetative state. This is a risk for the crops in case of late frost. Forecasts are not predicting such a scenario for the next couple of weeks.
Rapeseed prices were progressing yesterday in the wake of the palm. However, the palm is retreating a bit this morning due to uncertainties about the demand in the context of the coronavirus epidemic.
American market
US markets were closed yesterday.
This morning in pre-opening, the wheat is surging by about 10 cents/bushel. Traders are highlighting the decline of the wheat production in Australia and climatic risks linked to late frost in the northern hemisphere.
Black Sea market
Both in Russia and Ukraine, the shipments are slowing down and have reached their lowest level from the start of the campaign. Interim data from the ports are showing that the two countries have respectively loaded 245 000 tonnes and 205 000 tonnes of wheat during last week. This must be compared with 482 000 and 134 000 t in the previous week.
This situation was anticipated for Ukraine as the export supply until the end of the campaign are not exceeding 4 Mt. For Russia, such numbers are questioning about the reliability of a 34 Mt target (USDA) for this marketing year. Russia should be unable to reach 2 Mt of shipments in February and then respect the pace to display 32.5 Mt of export sales for the whole season.
