European market
The week will be marked by the return of buyers on the international scene where many tenders have been launched (Egypt, Algeria, Tunisia...) and this especially in soft wheat. The return of this demand provides support for prices after a decline during the month of September.
The decisions expected from the Moroccan authorities were formalized yesterday. From October 1st, the import duty on milling wheat will pass from 135% to 35%. Local operators are facing a sharp drop in local production and the import need will be important. Morocco’s state grains agency ONICL has also launched two tenders under the preferential tariff quotas for European and American origins. These quotas affect the milling wheat but also the durum wheat. French exporters will be very active on this demand because of attractive price levels vs the Ukrainian origins. So the operators could see the possible shipments departing from France at the end of September.
On Euronext, cereal prices are in the stabilization phase after the recent rebound observed for 10 days. Production prospects in the southern hemisphere and late harvests in the USA and Canada are raising concerns among operators so far reassured by supplies in the Black Sea and Europe.
As for oilseeds, the firmness of veg oil prices in Europe provides support for oilseeds. The rapeseed, which was decreasing since the recent highs, showed a rebound yesterday after the test of the first support level.
American market
Yesterday the USDA posted weekly export sales. The figures show an increase in corn activity with 1.46 Mt and in soybeans with 1.72 Mt sold. The rise in prices for these two products seems to have pushed buyers to reposition themselves after consecutive weeks of decline. In addition, ongoing exchanges between China and the USA are still supporting the market. The trade dispute has been in place for more than a year now and the Chinese delegation will come to the USA this weekend to continue negotiations and to visit agricultural production areas next week.
In wheat, export figures disappoint with only 286,000 t of sales this week. A call for tenders under Morocco's preferential tariff import quotas for the USA is now open. The US exporters will be very attentive to the volumes purchased by Morocco from Europe who also benefit from a similar program.
Black Sea market
In Ukraine, as of September 18, according to the country's Ministry of Agriculture, 6,994 Mt of wheat were exported since the start of the 2019/20 campaign. This is 2.8 Mt more than last year at the same date. At that date, all grain shipments amounted to 11.5 Mt (vs. 7.47 Mt in 2018). Barley exports amounted to 2.57 Mt (+ 785,000 t vs. last year). Corn shipments reached 1.9 Mt, an increase of 546,000 t from vs 2018/19.
Remember that the country must maintain a sustained pace of exports in order to sell a significant volume of production this year. In this regard, the Ukrainian railway company plans, from the end of September, to put into operation a new program for the shipment of goods, particularly grain. This program must improve the logistics efficiency of the country and make visible cargo train schedules. Thus, each customer will be able to see the goods, the quantities and the days of the shipment from a given station, and plan his logistics accordingly.
