European market

Another day of decline was recorded for all products yesterday, after the disappointment on the deal signed between the USA and China and in the context of technical sales, mainly on oilseeds. Geopolitics is part of price formation, as well as the tensions that exist between India and Malaysia. These tensions are causing a drop in palm prices dragging in its wake the rapeseed. All these subjects will be discussed at the Paris Grain Day international conference on January 30 and 31.

Wheat is decreasing on Euronext, in a context of difficulties in ports, a consequence of strikes by dockworkers and lock keepers. The social movement seems to be losing some of its intensity, however, leading to a slight drop in port premiums since the start of the week.

On the international scene, we note the purchase by Japan of nearly 118,000 t of wheat from the USA, Canada, and Australia. Taiwan also purchased a little more than 99,000 t of US milling wheat.

As expected and explained at the beginning of the week, the impact of the establishment of an export quota for 20 Mt of cereals by Russia for the next 6 months had no effect on the markets. This volume is higher than the figures expected by our analysts, the impact is therefore neutral.

American market

The continued decline in prices was registered in Chicago yesterday, in a context of growing doubts about the effectiveness of the trade agreement signed with China. Indeed, despite the amounts posted for the imports of US agricultural products to China, the fact that the latter added in its comments that it will depend on market conditions, raises doubts.

The funds were particularly active in selling yesterday, mainly in corn. They were net sellers for 40,000 lots of corn, 7,500 lots of soybeans and 6,000 lots of wheat.

Export sales were above expectations for corn and wheat, at 784,700 t and 650,600 t, respectively. However, they were in line with expectations for soybeans, at 711,400 t.

Black Sea market

In the Black Sea area, climatic conditions have changed very little for more than a month. Average temperatures are still significantly above normal. During the day, the temperatures are expected to continue to be above zero for the next 2 weeks over most of the winter crops planted areas.

In the past 15 days, Russian wheat has received about 15-20 mm of precipitations, most often with snow. In Ukraine and Romania, rainfall has been absent since the start of the year, increasing the soil water deficit. Recall that the water deficit persists since mid-summer 2019, which was particularly dry. The reconstitution or not of these water reserves will be one of the essential elements on the market at the time of the vegetative development.