European market
Markets were still losing ground on Friday in a context of ample global balance sheets. Wheat harvest is continuing in Russia and is posting higher yields. Weather conditions remain very favourable in Australia, leading to large wheat production estimates for these two major players. Last week, news of an upward revision of Canadian crop estimates for both durum and soft wheat weighed also on the market. .At the same time, the French harvest is finishing, and the crop will be under 30 Mt. The current heat wave will continue a few more days and is a matter of concerns for producers of spring crops.
FranceAgrimer reports winter wheat harvests now complete and spring barley harvests are 83 % achieved as of August 3. Corn crop ratings are down by three points from the previous week at 74 % rated good to excellent.
On the international scene, we can note the sale of 456,000 t of US soybeans to China and a tender from Pakistan in 1.5 Mt of wheat.
At the beginning of this week, the euro is dealing at 1.1790 against the Dollar and the crude oil remains firm at 41.80 USD per barrel.
Rapeseed ticked down on Friday, despite very firm veg oil prices, mainly due to a strong demand from China. Canola prices in Canada are dealing at their highest level since October 2018. Palm oil is retreating a bit due to a rise in Malaysian weekly stocks.
American market
Prices in Chicago retreated last week. Several chartist points have been broken, pushing funds to sell off.
Weather conditions remain positive for soy and corn crops in the US.
Funds are still holding a net long position in soy oil but are shorts in soy meal. Crushing margins are quite favorable for now due to a strong appetite of Chinese buyers for veg oils.
Last Friday, funds were net sellers in 15 000 lots of corn, 9 000 lots of soybean and 5 000 lots of wheat.
On a chartist point of view, trends are currently bearish on main products. The wheat has broken the psychological level of $ 5/bushel and the corn could test the support of $ 3/bushel during the week. This Wednesday, the USDA will release its monthly report.
Black Sea market
The corn has now successfully passed the pollination phase in Ukraine, but the weather has remained particularly dry since the ear formation process. Indeed, rainfall over the Ukrainian corn belt during the last two weeks has been rare. As a result, many local analysts have recently lowered their corn production estimates. However, while the numbers differ, they all remain convinced of a new record crop.
During the week, 15 to 20 mm of rain should ease crops over the main producing areas. We will soon check crop conditions and the potential in a corn crop-tour that will begin on 24 August 2020.
