European market
The wheat tender from Algeria ended by a purchase of 560,000 t. Prices displayed are around 231-232 $/t CIF. Wheat origins are optional, leaving time for exporters to make arbitrages between the various areas of shipment. However, the level of prices is suggesting that European origins, and especially those from Baltic countries, should be delivered. French operators are strongly vigilant on the evolution of the Eurodollar which is conditioning the level of competitiveness versus the other origins that have less suffered from the production drop this season.
As regards corn, growing conditions in France should lead to an early harvest this year. The harvested areas will obviously be a determining factor to be followed with significant competition linked to fodder needs in the breeding areas.
The previous day's upward movement on rapeseed was not confirmed yesterday and the Euronext's November 2020 delivery was trading below €380/t again. The euro's recent upward movement, even if the single currency retreated below 1.1850 against the US dollar yesterday evening, is a factor to watch as Canadian canola supplies return to the market at this time of year.
American market
US operators reported the sale of 192 000 t of new crop soybean to China. Sales volumes in this pre-harvest period have jumped compared to previous seasons. Chicago prices on the November 2020 delivery have marked a highest point during the session before erasing a part of the gains. Current crop tour in Iowa and Illinois is showing a heterogeneous situation. Indeed, compared to last year, figures look better in Illinois and less positive in Iowa.
Corn prices are running out of steam after the rally observed at the beginning of the week. Technically, the December 2020 contract has managed to fill the gap opened on Monday around 3.40 $/bu. The Pro Farmer findings are showing a much better potential in Illinois than previous years. In Iowa, on the other way around, yields are currently below last campaign and the acreage has been reduced after the Derecho’s storm.
Wheat prices in Chicago have been supported recently by the weakness of the dollar. Yesterday, wheat prices have increased slightly without reaching beginning of week’s levels. The competition on the international market will be stiff in this harvest period. The Black Sea potential is high and the next crop in Australia could also be important in coming months.
Black Sea market
Growers in southern Ukraine have started harvesting sunflowers. As with winter crops, results are globally disappointing this year. According to the first returns from the fields, average yields are 0.6-0.8 t/ha compared to 1.3-1.6 t/ha last year at the same period.
Harvesting will now begin in the centre of the country. The expected rains are likely to slow down the pace of field work. Processing plants are ready to receive the first volumes and even the slightest delay could lead to disrupt exports. It should be noted that this year exporters registered record forward sales of sunflower oil and sunflower meals due to strong demand from China and India.
