European market
The strong rally seen on Euronext on Wednesday has been followed by a more mixed session yesterday. Wheat prices have recorded a new high during the session on the December 2020’s delivery at € 198.50 before erasing gains to follow the decline movement seen in Chicago. Traders are still paying a great attention to Black Sea prices’ evolution. Despite of high prices, the demand remains strong for these origins. The pace of sales to China also needs to be monitored. In addition, sowing conditions for the next harvest is still an element of uncertainty with dry conditions observed in some Black Sea areas or, on the contrary, the return of rain in Western Europe.
The progression of corn harvests in France is adding some supply to the cereals’ market. Corn prices remain close to their highest levels since April for the 2020’s crop but this cereal remains attractive due to the wide gap between corn and feed wheat prices. The arrival of rain and wind over France this weekend will delay at least temporarily the progression of harvesting work in some regions.
Yesterday, the rapeseed was the only product recording gains.The November 2020’s delivery of Euronext has tested the € 392/t before erasing a part of the gains to close at € 389.25/t (+4.25). The drop in oil prices and the difficulty of palm oil prices in Kuala Lumpur to confirm the attempt to rebound are slowing down the rapeseed dynamics.
American market
The US market has rebounded after the publication of a quarterly USDA’s report that showed lower stocks of corn and soybean. Corn prices hit a new high since early March on the December 2020’s delivery over $3.80/bushel. The rise was also fuelled by strong weekly export figures over 2 Mt.
Export volumes are also decent in soybean with more than 2.5 Mt of soybean shipped last week. The strong momentum in place from the beginning of the campaign has been confirmed. The soybean on the November 2020’s delivery is now dealing above 10.20 $/bushel. The strength of soybean prices is pushing soy meal to deal on new highs. The soy oil on the CME is in little evolution and is currently testing the support area of $ 32.40 on the front maturity.
Black Sea market
During September, Ukrainian grain exports have been buoyant with a total of 4.25 Mt of cereals loaded, including 3.47 Mt of wheat, 0.75 Mt of barley and only 30,000 t of maize. It should be noted that Ukraine has never shown such momentum in its recent history Ukraine at this early stage of the season compared to the USDA’s objective. Indeed, in the first three months of the season, Ukraine shipped nearly half of its available wheat exports! The arrival of the corn on the market will mechanically slow down wheat exports. This year, Ukrainian wheat supplies will be particularly low in spring, leaving room to Russian origins on the international stage.
