Analysis 22/06/2020

European market

Prices on Euronext find some support in the euro's decline against the dollar, while a bearish orientation continues in Chicago, mainly in wheat.

The euro is dealing at 1.1190 against the US dollar this morning and oil is still close to a key level at 40 US dollars a barrel in New York. Indeed, this threshold is considered as a break-even point from which the US shale industry returns to profitability.

The week will be marked by very high temperatures in France, which will help to speed up the winter barley harvest and measure more precisely the impact of the spring water deficit on this crop.

On the international scene, Tunisia has purchased 159,000 tonnes of milling wheat and 50,000 tonnes of feed barley from optional origins. Black Sea origins are currently the most competitive.

FranceAgrimer published on Friday its weekly crop rating. Soft winter wheat remains stable at 56% judged as good to excellent, which nevertheless remains the lowest level since 2011. No change also on winter and spring barley, which were posted at 52 and 54 per cent respectively.

The corn conditions are depending on regions and on the rainfall recorded in recent weeks. Overall, the major producing regions have benefited from precipitations. 83% of the crop are considered as good to excellent.

Rapeseed prices progressed on Friday in the wake of the palm. On this last product the exports are sharply increasing. The rapeseed oil is also up like the canola in Canada.

American market

Wheat fell again in Chicago on Friday with prices at their lowest level since last September, in a context of harvest pressure and a lack of competitiveness of American origins on the international scene.

The soybean market is still benefiting from Chinese purchases. US prices are much lower than those from Brazil, allowing China to obtain supplies at a better price and recommit to the January’s trade deal with the US.

Corn is benefiting from a short-covering movement from the funds, but these players still remain very short on this product.

On Friday, the funds were net buyers in 5,500 lots of corn and 4,500 lots of soybeans. They were net sellers in 2,000 lots of wheat.

The week starts with little change in pre-opening.

Black Sea market

Although the 2020 harvest kicked off about ten days ago, the progress of the harvest is largely hampered by stormy rains in the southern regions of Romania and Ukraine. These frequent rains do not give time to the barley to cut its moisture content. For example, last week some growers harvested barley at 16 to18 per cent moisture.

Additional rains are expected over the next few days in Ukraine and Romania and from mid-week in southern Russian plains. As a result, the 2020 barley crop in the Black Sea region is expected to be slightly later than a normal year. On the other hand, a rainy weather is positive for the filling of wheat as well as for the development of maize and sunflowers.