European market
Prices for straw cereals continued to fall in the wake of Chicago and as Egypt's tender concluded without surprises with the purchase of 120,000 t of wheat from Ukraine. The prices for the tender were 210 $/FOB with a cost of freight between 10.40 and 10.90 $ added. It should be noted that the prices of a French offer were not very far from the other offers of the Black Sea origins, making it possible to display relatively competitive offers for French origins. The major downside element now is the weak export activity with absent buyers on the market.
On the international scene, there is a new sale of 132,000 t of US soybeans to China, even if the Chinese authorities asked their national companies to avoid American origins, in the context of the tensions between the two countries linked to Hong Kong.
The first harvests of feed barley began in France in the earliest regions. At the same time, the first winter wheat cuts started in the southern United States.
The dollar continues its decline, displaying this morning close to 1.12 against the euro, while crude oil keeps to rebound, posted at 37.60 $/b in New York this morning.
The total EU wheat exports for the current season are displayed at 31.33 Mt as of May 31, up by +63% vs last year. Same progress is seen for barley with 6.78 Mt exported.
Rapeseed benefits from the support of crude oil, soybean and palm prices. The same is true for canola, even if the destination to China could be closed for Canadians due to the Huawei affair.
American market
The American markets were firm yesterday in soybeans, welcoming the continued Chinese purchases, despite the geopolitical tensions between the two countries. It should be noted that at the moment, the American origin is more competitive than the Brazilian origin.
Corn benefits from the purchase of very short positions held by the funds, as we enter a traditional weather market period between June and August on this product.
Wheat lost ground again, despite a deterioration in the wheat crop conditions in the USA. The American origins remain, even with this decrease, uncompetitive on the international scene.
The funds were net sellers yesterday for 5,000 lots of wheat and net buyers for 2,000 lots of corn and 10,000 lots of soybeans.
Black Sea market
Each year, at the start of the season, the Ukrainian authorities sign a memorandum with exporters aiming to define a limit volume for wheat exports. The first figures published by the Ministry of Economy suggest a significant reduction in exports for the coming season. In fact, the authorities currently forecast a wheat production of 23.2 Mt, which doesn’t allow exports for the 2020/21 campaign to be higher than 14.9 Mt vs 20.5 Mt of the ending season. For its part, the grain exporters association recently raised its production estimate to 26.8 Mt with an export target of 18 Mt (19 Mt for the USDA).
Thus, the uncertainties are important before the two parties decide on an agreement when the advance of the harvesting will allow more visibility on the level of production 2020.
