European market
Grain prices corrected in the first session of the week, after several days of renewed strength. By hitting €235/t on Friday, Euronext September wheat was back on the highs of last December.
Weather conditions across the world are the main focus of attention. Beyond the technical aspect, prices also welcomed the return of some precipitation in the dry zone of southern Russia. However, this will not be enough to compensate for the water deficit in place since early spring, and could once again lead to price adjustments. Meanwhile, in Western Europe, the weather remains particularly capricious, raising further doubts in operators' minds about production potential. The dry conditions over Western Australia are also beginning to attract attention. Although it's still early in the season, the USDA's local attaché is forecasting wheat production of 25.8mn t, which would place the 2024-25 crop below the average of recent years.
On the international scene, Morocco's ONICL announced that it would continue its policy of subsidizing wheat purchases until the end of the year, in view of the very low harvest forecast for the country this year due to lack of rainfall.
In oilseeds, rapeseed August contract on Euronext tested last October's €465/t level, while European production is at risk. Rainfall, lack of sunshine and low temperatures could adversely affect yields, even if it remains difficult to accurately estimate the loss for the time being. While the need for imports from Australia will be strong, operators are also fearing sowing problems in the west of the country.
American market
The markets remain volatile as corn and soybean planting continues in the USA. As usual, this is a source of stress for operators, which is immediately reflected in prices. This week, the USDA reports that corn planting is 27% complete, within expectations and 5 points above the average of recent years. As for soybeans, 18% of the area is planted, compared with an average of 10% in recent years. Still a matter of debate, acreage will be a key point for the rest of the season, and the first USDA monthly report showing data for the coming season will be published on Friday May 10.
The USDA report will also provide further details on the South American corn production, given the big differences between the various estimates. This is a game-changer, however, since US exports show a correlation with the Brazilian and Argentinian crop estimates.
In the USA, 49% of winter wheat is rated in good to excellent condition, 1 point less than last week. Spring wheat planting is progressing well, with 34% of work completed, compared with 28% at the same time last year.
Black Sea market
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