European market

Harvests in France progressed a lot this week. Operators still report overall a good quality in both protein and PS.

Harvest progress in Northern Europe reinforces expected yield declines, pushing buyers to come back and pulling prices up on the physical market. Prices on futures market are also progressing, the September 2018 expiry on Euronext reached the level of 188 €/t and is close to its highest levels for almost a year.

Markets in Europe are also increasing with a euro/dollar parity which is displayed below 1.17 at the time being.

In oilseeds, prices have not changed so much, still suffering from a lackluster European context in terms of trade opportunities for biofuels, even though volumes of the 2018 crop are decreasing for rapeseed. Operators are currently watching import prices for canola, which could start to be more interesting than European rapeseed in the European Union which is much more expensive.

American market

Weekly export sales figures released yesterday by the USDA were in line with expectations for the current campaign. In new crop, sales were higher than expected. In corn, volumes reached 774,500 t and soybeans exceeded 613,000 t for the next season 2018/2019.

Prices then rose, buoyed by the surge in demand for US corn, while the Buenos Aires stock exchange slashed its corn production estimate to 32 Mt. At the end of the day, corn was trading at 3.65 $/bu for the December 2018 deadline, thus returning to levels equivalent to July 10th. The rebound movement observed since the recent lows allows corn to come and test the downward trend in place since the end of June. The situation is similar in soybean, however, this market is evolving in an uncertain context because of trade tensions between China and the USA.

In wheat, the maturity of September 2018 rose yesterday and is now displayed above 5 $/bu in Chicago for the first time for the last 7 days. However, crossing this level has not led to a bullish acceleration for the moment while the market is still hesitant between the US situation and tighter fundamentals on a more global scale.

Black Sea market

Russian authorities reported yesterday a very aggressive 2018/19 export campaign launch.

Indeed, Russian operators have already loaded more than 2 Mt since July 1st against 1.1 Mt last year at the same time. Exports of Russian wheat are displayed at 1.4 Mt against 0.52 Mt last year. Those of barley to 0.46 Mt against 0.27 Mt last year. In addition to the very strong competitiveness of this origin, this good dynamic of the beginning of the campaign is mainly due to a very early harvest in the South of the country, near ports. Producers in this region are finishing harvesting wheat and barley with still disappointing results compared to last year since the reduction in yields flirts with -20 %.