European market
Grain prices managed to return to their resistance zone during the last session of the week. The Euronext wheat December contract closed at €193/t, and corn March, contract closed at € 188/t. This impulse was mainly driven by Chicago, while the markets are still welcoming Donald Trump's statements regarding the trade agreement between the United States and China.
On a macroeconomic level, the euro/dollar parity manages to remain below the 1.16 level. Jerome Powell's comments cooled hopes for a US rate cut at the December meeting. At the same time, the European Central Bank extended the status quo by maintaining its key interest rate at 2%.
Despite this monetary support, the French wheat origins continue to lose competitiveness, now showing around $227/t. If the Russian offer is $5/t more expensive, the Argentinian origins, meanwhile, are trading at $210/t for 11.5% FOB Up River. Such a gap explains the growing interest of Moroccan operators in South American wheat. It remains to evaluate the quality of the wheat, while the harvest is always expected to be abundant.
In France field work is progressing:
Winter wheat: 68% of the sown areas, compared to an average of 61% in recent years
Winter barley: 80%, compared to 76% on average
Corn: 82% harvested, compared to 74% usually at this time of year.
Rapeseed in February did not benefit from the impetus of other markets, especially soybeans, during the last session of the week. The prices have returned to their support of 480 €/t, while the price gap between the French origin and the Canadian canolas remains considerable.
American market
The uncertainties surrounding the trade agreement between China and the United States continue to influence the markets, in particular due to timing issues. The US Treasury Secretary remained vague in his statements regarding future purchases of soybeans. Although it is still difficult to decide precisely on the volumes that will be contracted in the coming months, the markets remain generally confident.
Soybeans manage to cross the psychological mark of $11/bu, reaching a high on the January contract. As a reminder, at the beginning of October, this same contract was traded around $10.20/bu, testifying to the gradual buying back of positions by financial operators. Corn, for its part, is trading around $4.30/bu on the December contract, following the movement with caution, in a context where no commercial agreement has yet been sealed for this product.
Note that, despite the "shutdown" still in progress, the USDA statistical services announce the partial resumption of certain publications during the month of November. From November 14, world production estimates will be published, on which the USDA will rely to partially adjust the supply/demand balance on a global scale.
Uncertainty persists regarding the progress of the corn and soybean harvests, but especially with regard to average yields. Adjustments are to be expected, while in its latest monthly report, the USDA continues to expect a record production of more than 425 Mt for corn.
Black Sea market
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